If I spend real money to get prestige, then yeah, I'd be annoyed if my hard earned towns were being sieged into the ground because RHY wants to control Keppen. It might be a game, but for some people it's enough of a joy in their life for them to invest cold hard currency in it. If you destroy their towns, then you cost them money which they invested for their own enjoyment.
Personally I don't really care who is right or wrong, who planned what, or whether this is about a mine, an aggressive act, or some political machination that is of zero interest to me. Obviously some people are trying to goad this on, when one side is clearly saying it does not want escalation. To me that's evidence of a desire to make peace. Rejection of that is clearly a desire to keep the warmongering going. I predict peace won't happen until RHY owns the bits of Keppen that they want. Tough luck if any of the people being razed happened to have invested money in building those cities.
You can play like that if you want. It's a sandbox, it develops it's own ways of functioning. However, for every action there is a consequence. If, as Saladin indicated, this goes on and people become involved in a war because they feel obligations to support an ally, there will be numbers of them who, after it's all over, will stop playing. That is one consequence of having war inflicted on players who basically wish to avoid it.
People who say "oh you can rebuild even if you lose your cities" do have a point. You can. "Don't take this too seriously, it's a game" is also a valid point. However, you can have as much validity as you like in your viewpoints, but if people don't like what you've done, and decide to walk away, then that's not a good thing for Illy. Which is what it all boils down to really.
People who put real money into something don't like to lose their investments. They tend to go to greener pastures if the people who took that money look like they are going to keep taking it. Do so at your own peril, because if the way forward in Illy is going to involve considerable financial hazard, it's support base will surely dwindle.