Totally reasonable reactions, and thanks! I shared this hoping for long-time readers to correct me if I’ve left something out or got something wrong. 
In this case I think the model more or less holds up, though don’t stop pushing back where anything I say below sounds off. When it comes to the 4% category… sorry to be obscure, but creating a Ward or floating mountain relies on something much scarcer than blood, and a “something” that isn’t of general-purpose use. You couldn’t use it to scour a province or dig a shipping canal, either of which could only be done through eye-watering investment of blood resources.
Official propaganda uniformly makes it sound as if the Wards use up well over half the blood harvested in the Hegemony. Even most Theurges would believe that the Wards use at least a third of the total… though Theurges of Cerlota’s level have learned enough to doubt that. (As she says in G2 Ch1, “The Wards do genuinely consume much blood, but far less than they should, given their outrageous scale and power.”) The official story fits with having “they die to protect us from Xaos and its minions” as the primary justification for Harrowing, and keeps Halassur’s researchers off track when it comes to figuring out how to replicate it.
As for the dilemma around dropping the Wards, 4% of the three and a half million people Harrowed each year in the Hegemony is still a big number. Each Ward costs well over 12,000 lives per year in maintenance. Unlike, say, powering riverboat grain transport, it’s not one of the things an MC who spreads knowledge of Theurgy to the masses could try to do piecemeal with lots of people cutting their hands. MCs trying to switch to a blood tax will find that the scale of donations required to keep a Ward up could generate enough harvests to feed over a million people a year. It will I think be an unusually lucky MC for whom that trade-off doesn’t represent a dilemma.
The Hegemony is making relatively few Plektoi these days, especially the hounds, which are extremely Theurge-intensive – for each one you make, you’re tying up a Theurge to spend most of their time as its keeper. The hounds are disproportionately useful in less populated areas of the Hegemony, where they can effectively terrorize areas where the Hegemony doesn’t want to base large garrisons. Because Plektoi can’t cross a Ward, the Hegemony can’t turn the tables on Halassur by sending a horde of tens of thousands to overrun the enemy; the defensive uses of Plektoi in the contested zone are real but limited. And maintenance is actually the lion’s share of their blood cost – Theurgically enhanced nutrition, tweaks to keep their Changed bodies from breaking down, and (for the hounds) seizing control when you want them “on the leash” but they snap and try to kill and eat everything in sight.
Finally, canal maintenance is the cornerstone of the Hegemony’s limited-scale industrial revolution. Keeping up a continent-wide network with the capacity to transport millions of tons of grain and other trade goods to the center of power is enormously costly – but it’s those millions of tons of grain that sustain the populations that ultimately fuel the system. I think within the gameworld, it makes sense for the Hegemony to have its infrastructure demands crowding out what might otherwise be more intensive industralization.