I hope I am not annoying with my usual "Ah OK, but..."
Here, I understand I think better now why this upgrade works that way. But if your explanation has changed my point of view slightly, I still want to discuss it a bit more.
On the other hand, internal buildplots are much rarer than external buildplots
Yes, however all settlements are not economy building and it's hard to imagine a game with Gondor without signal fire or a game with Mordor without Cirith Ungol barracks even if it can happens, but those buildings are really impôrtant, thus they is often one settlement at least used at non economy purpose.
The increased buildtime and buildcost is meant to give you a chance to get back into the game.
That is true if I made the safer choice and upgraded my internal economy. Then, I will indeed have a way to comeback and regain map control. However, if as you, I have done the bold choice to upgrade my external economy before being pushed back in my base, then with both the price and building time doubled, it will be even harder to regain map control than if my settlements were at level 1.
THE IDEA OF PROMOTING DEFENSIVE GAMEPLAY
This change was implemented to reward players for successfully defending their settlements instead of running around the map and constantly trading one settlement for another.
I like this idea indeed. It is true that if my suggestion was applied, it would last 2,28 minute approximatively for a level 3 building to overtake the economic production since it's construction while it's 3,28 for now, so it would make quite a big change and maybe lead to this trading of one settlement for one another.
STILL THE INTEREST OF A FASTER BUILDING TIME AND THE WAY TO DO IT WHILE MAINTAINING THE CURRENT BALANCE
Still, a faster building time for level 2 and even more for level 3 settlements would surely be a good idea. Why ? Because it gives an interest other than economy. It helps to map control, to defend effectively the settlements.
With a faster building time at level 3 especially, the player would get 2 advantages :
-the building will get hit points very quickly so it will be harder for the ennemy to destroy it while it's building which is often a slight blow when the building costs 400.
-If the settlement has been conquered in a zone of combat, it will be able to defend itself very shortly after being built by throwing arrows to the ennemy.
I really think those 2 elements would improve drastically the gameplay in two situations :
-the first in a pvp game I talked about above here, when all the players have upgraded their external economy, and one of them has been pushed back. If he has the possibility to pay for even one or two settlements, he will get some very short term value out of it which you need when you are in a comeback operation.
-in a pve game against the AI, ti would be a lot better because for now, in every interesting game, it is impossible to gain and control enough settlements, the Ai will always rush his heroes to force you to flee to your base, so that Forged Settler's Tools are very often useless in those game which is quite frustrating.
With short term-value out of your level 3 settlements, those upgrades would still be useful even in end game because for now, I always go straight to the ennemy castle without any care to the settlements.
I know that this game has been conceived for pvp games and not pve. However, you guys have done a huge job to update the AI, to make it as smart as possible, and you have done that really well. Some games against the AI are very cool and entertaining, so that improving the way upgrades work for pve games would make your work even more valuable.
And still, it would also improve pvp game.
HOW TO CONCILE ALL OF THIS ?
I will end by that. I agree, the current balance must not be distorted, but the balance you spoke about in your reply seems to concern the economy.
Why not then for the reasons I detailed above decreasing the building time for higher level settlements while even more increasing their cost ?
The economy balance would not be distorted while you would give short-term value (I insist on that term), for your level 3 settlements which they lack for now,
Why not 25/20/10 seconds of building time for a cost of 200/325/450 ? or even 200/350/500, it will also be better than now because what you would get with that is not a very strong eceonomy, for that you would still need to defend well your settlements and as you said in your answer, that issue I agree is important, but upgrading your external economy would bring you help to regain map control and to get back to the game !
Finally and I will end by that, one of my game partner sometimes says that upgrades are reasearched not quickly enough, it is a feeling that can be experienced by some players. This suggestion could bring more dynamism in the endgame, bring more intensity.