Considering that about 90% of the gameplay comes from interacting with the other cities in the region, I really don't think this would work out as well as people think it would. The cities are small enough that you can't supply all the power/water/garbage/people/industry out of one town, and it's the EA servers that are maintaining the connections between them.
The question would be whether a single PC has enough computing power to run the entire region. It looks like the new SimCity engine actually simulate behavior of each car/person and resource transportation. Would simulating all the agents of the entire region works?
I don't know if that argument works economically. EA has to support something like 100,000 simultaneous users, so if the server side needs more than one PC worth per user then their EC2 bill would be off the charts. (I see nwh made this argument earlier.) I suspect that inactive cities in a region are simulated with a lower level of detail.
Since players can run at different speeds, I'm going to say that inactive cities are simply not run and exist in a paused state. They probably produce/consume resources at a steady rate from their neighbouring cities, based on a statistical average.
EA does not have to simulate the cities now, each cities are already simulated/view only by the owner of that cities. EA only have to relay information between cities.
But they would have to do it if you can actually control other cities in the regions. If you play one city and then switch to another city for, say, 1 game year, what's going to happen to your previous city? Does its time stop? Would AI have to take good care of all cities?
It doesn't seem like the game is that taxing on decently good processors. It seems like you should easily be able to do those calculations if you have some extra cores lying around.
One thing to keep in mind is that even in big, 16 city regions, only subregions of 4 cities each are actually connected by roads and rail. In fact, these subregions are practically autonomous, except maybe for air travel (I don't know). This is why you have 4 great works per 16 city region. So first thing to do would be, if there are actual calculations taking place between these subregions, cut that off.
Now we only have the interconnections of 4 cities to deal with. Only 1 of these cities is 'active' at a time (the one you're currently playing on). I don't see why you couldn't do a rougher simulation of what is happening between your active city and the three other cities. You don't have to track agents from other cities to the active one, just have a counter that keeps track of total population.
I may just be a naïve computer science student, but this doesn't seem terribly hard to do if you already have everything else in place. And it couldn't possibly be slower than what they currently have: I've watched one streamer have 3 cities within a subregion all have different values for progress on a great work. They weren't synced up at all. It was just silly. On one local machine, there's no way this could happen.