I REALLY REALLY WANT to be able to use the multicultural assets of a taken city. That is huge fun for me. IMHO, this is a balancing issue not a problem.
Some of the most fun that MoM provided was you could get access to new racial advantages and tools and units without limitations. It becomes a strategic advantage to go for those cities.
I will agree that this is fundamentally a balance issue and not a bug. Yet, the point is that it is a problem since it offers huge bonuses without any drawbacks. While I will say that it can be fun to get these multicultural cities, the current result is so wildly unbalanced that it is almost worth having another faction take one of your cities just to get them to add their improvements to it. It is one thing to give a player access to a race specific unit, it is another to allow them to get 150%+ resource bonuses, negative building times, etc.
I will agree that there is something to be said about the way Microprose used the hub cultures to add interesting dynamics to capturing various populations. The problem with references to MoM here is simply two fold. Firstly, MoM used various populations give access to special units and buildings, specific to that population. Yet, this is not at all the case for Elemental as populations are not handled by their various cultures, and capturing an Empire city does not allow a kingdom faction to building Empire buildings or units in that city. Secondly, MoM ultimately uses a single building list for all races, though each race has specific build restrictions. In the end, you are not really getting access to anything "special", simply modifying your restrictions for the particular city. In Elemental, each races has an unique building pool each of which is larger than the entire building pool from MoM, and most buildings are tied to a set of technologies. So even if they gave you the ability to build improvements based upon the faction of the city, you would be unable to build the vast majority simply because you don't have the techs.
As a mod maker, I can tell you that these cities make it almost impossible to balance new improvements, as you have to take into account that your new improvement could have to balance with both pools of improvements. It is doubly difficult if you make an improvement that is usable by both as you have to ensure that 2 of them will not completely unhinge the entire game.