While I agree with you that it would reduce squashing, even a real-life regional airline like Mesa has more than 150 destinations, so I'm not sure about the "realistic" part. Then again, that's not really comparable because regional airlines in the US are just extensions of legacy networks and don't compete on routes themselves.
I don't know how "realistic" the game is anyway???? With as many flights as we have flying into airports, I doubt those are realistic numbers (though I may be wrong). I'm pretty sure that 5,000 mile flights with a Y rate of under $150 isn't realistic though. It's just hard to keep a moniker of "realistic" on a game that has a lot of unrealistic traits.
It's taken Mesa 30+ years to grow to just over 150 destinations, and with our worlds at 40 years...it might be more realistic than you think. According to Wikipedia, in 80+ years United has under 400 destination. So, as a rough estimate, half of 80 years is 40 years. 40 years is our typical world length. Half of 400 destinations is 200. So in 40 years, 200 destinations FOR A LARGE airline isn't that far fetched.
The whole regional example was just that...wasn't intended to be the benchmark for an airline in a world limited to just 150 destinations.
With limited destinations, once an airline gets to the max, they can then concentrate their efforts on finding more profitable routes than their least profitable and adding more profitable routes. They would actually be managing their routes instead of just buying as many planes as they can and putting them on as many routes as they can. What grows from this is a lack of care for what happens to the profitability of their routes because they can add more profitable routes than they lose to competition. So, they don't manage their routes, they just grab new ones.