Sorry for digging up this rather old thread, but seems that the default (Year 2050, Locality Factor 10000) has not been changed yet.
I strongly agree with Z9999+ that people, no matter in the past or nowadays, mostly travel to nearer places. This is obvious -- no matter how fast transportation becomes, it costs to travel far, in terms of time and money, unless in the future people can go anywhere by teleportation free-of-charge, but that is apparently unlikely. From an economic point of view, both time and money are scarce resources to a human being, thus if a nearer substitute destination can be found, they will usually prefer nearer places, except tourists which might have a stronger tendency to prefer attractive places and care less about distance.
One important goal of preference for nearer destinations is to avoid insane overcrowding and massive profits in late games. A locality factor of 10000 basically means that distance matters no more -- but can that possibly be true in reality? For large maps with numerous cities, the overcrowding could become out of control -- this is not a challenge, but a headache to players.
If some people prefer such insane overcrowding in late games, fine, they can set locality factor to 10000. But if default is also 10000, this will only scare away the new players.