The main reason why having additional teams is good is this:
BB is a game with a long learning curve. You need to have multiple options to test strategies and figure out how everything can work.
By the time I figured out even a decent amount of strategy and started doing things close to the right way, I'd been up to Div. III and back down again. And I still have yet to put all the useful draft and training advice I've read into action. Basically, I just played the game and learned by trial and error for a few seasons and got fortunate enough to win a league and promote. Then and only then did I get into a league with an active forum and learned all the things I should have done sooner, like build arena up, etc.
I am now stuck in the hardest league in all of Div. IV and have been for several seasons. The only way out might be to get really bad again, drop down and then try to promote in an easier division. It takes years to do that, and in the meantime I'd really like to try to win with my current team.
Why not be able to start over in any other location and help populate countries without depth of competition? It's a way to learn more, test strategies and enhance the game by paying more to play more. I just don't see a downside.