Reasons why I had to implement a penalty for when players hit 200+ population:

Reason 1 - Lag, once there are over 400 units on the screen, performance is hit and lag begins to start.

Reason 2 - When using playbills SpawnSquad to create the units, it ignores the players population cap. There is an option to "ignore player cap", but in multiplayer maps this causes the level to crash (desync error).

:)