I am not open to the idea that there is that much more to the simulation. If there was, there wouldn't be reports of people being able to play without connection for extended periods as long as they don't try to interact with the region.

As far as I can determine, and others (I frequent /r/simcity, this seems the consensus) agree, the requirement for the connection boils down to two things:

1. Maxis thought that the interaction between various cities in a region and the global marketplace for resources was good multiplayer gameplay.

2. DRM.

Which reason is actually primary will probably only ever be known by insiders of EA/Maxis.