It's not necessarily removing all those people, just relocating them.  The people who would have lived in Smallville would have simply instead lived in the surrounding towns; likewise, the potential population of Metropolis would have just spread out throughout whatever vague area of New England the city's located in, like Clark himself.

And from a purely practical standpoint in terms of the RP itself, was anyone really planning to have a character arc in Smallville or Metropolis that I took away from them?  If it's going to be an issue, I can scrap it and work with something else, but if it's not stopping other players from using their characters in the way they want, I really don't see the problem.