I think thats the way it would be in reality.
No offense, but I wish people would stop using this as an argument.

Another bad thing, it could create a situation in which players end up fighting a war of attrition.
Pretty much describes how I feel about it.
Two players battling against each other late-game could set up frigate-spamming construction. All other things being equal, if one player loses half of his fleet to a major defensive operation, he can build the first replacement ships TWICE AS CHEAP as the other player. This allows him to convert his strategy between capitals and frigates, and respond more nimbly to attacking player strategies. If the attacker is, for example, spamming fighters, the smart defender can scuttle to free up some production and supply and then start churning out flaks and hangars. Meanwhile, the attacker doesn't have the same empowerment to spend as much and switch gears to a different fleet balance to attack.
It's also much harder on David in a David vs. Goliath economy - if your more effective but smaller empire succeeds in opening the door to invading a larger neighbour, this option means the neighbour can react faster than you can because they suddenly start generating uberincome.
I think the idea of *downgrading* your research
status (and paying the equivalent of a small infrastructure decommissioning fee) makes a bit more sense than just autogiving this for free. This option allows the player who just got their fleet annihilated to choose if they want to reduce their supply level altogether to gain the income bonus, but - this is the key bit -
they lose the free ability to build their fleet back up to their original level again. They have to upgrade that level of supply again, which buys the successful attacker a bit more time to take advantage of their already-achieved larger fleet cap.
One other option is to cap the reduction. If you're at research level 8, the lowest you can possibly ever pay is the supply penalty for research level 6, even if you only have one ship left.
Sins games are already long enough.

-- Retro