That's a good point, but there are two problems with it: First, that's how it's supposed to work, but very often it just doesn't. As I said previously, I've had many, many cases of a town absolutely packed with a certain type of goods but with the price still high. The second problem is that the economy is there more or less for its own sake, it doesn't tie into anything else. Trade supposedly influences the prosperity of settlements, which in turn affect the amount of money that settlement is then able to produce in taxes, right? Except as a player you have tons of ways to make money other than trading and collecting taxes, like investing in businesses, selling loot and slaves, raiding enemy villages, etc. As a result, you don't really care whether a town is prosperous or has just been looted, and even if you did care there's not really anything you can do about it. The effect on the player is minimal, and the effect on AI lords is completely nil since they seem to have unlimited funds and the ability to conjure troops out of thin air anyway.
I don't see how it exists for its own sake, as the player is expected to feed, hire, and pay wages to their troops, so upkeep is a big deal. You're pretty much forced to wade knee-deep in the economy for a good long time before you can support the numbers necessary for major battlefield effectiveness. There are, as you say, lots of different ways to go about raising funds, but this is a feature offering re-playability and appeal to a wider range of play styles. Plus, every method of raising money has large effects on gameplay. Doing quests raises or lowers reputation with various people, which opens up different gameplay options. Razing villages produces short term gain, but long-term difficulty as you probably want to own those villages eventually, at which point you'll want them to be healthy and cooperative. Looting battlefields and selling slaves is great also, but requires that you be well-established to begin with and it's easy to screw up a couple times and fizzle out as you need to balance finding victims challenging enough to produce loot capable of maintaining your force without losing any battles, leading to loss of morale, leading to more lost battles, leading to you having to start all over again building up your wealth and military presence. I could go on.
All of this stuff, in my experience, has a pretty dramatic effect on the player, and I'm pretty sure it has some effect on the AI lords as well. A faction put under tons of pressure will get ground down, as they will lose battles and then re-appear quickly with another force, but after so long you will notice the number and quality of their forces will dwindle. If it was as hard for them to bounce back from a loss as it is for you, the game would be way too easy.
And I cannot compare this level of depth in an open-world dynamically-evolving system to any other major corporate produced titles (that I have played) except for maybe the Civilization franchise. I'm not exactly snobbish about it. I will play flashier, mainstream games and enjoy the hell out of them... but it's short-lived. You win the game, you do everything there is to do, and it's over. Then it's back to these indie titles that are simply designed not to run out of stuff to do, despite being less polished in other aspects.