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The biggest problem is how many cities have reused content. Even if you just used the first 4 regions, that's 4 regions with a beeg mart, 4 regions with reused gym types, 4 regions with their own tutor and breeder places, etc. You'd have to completely re-purpose most cities to get rid of that redundancy. I don't think there is enough new features from gens 5-7 to fill in the gaps there, so you'd have to come up with a bunch of new stuff and redesign half the cities.
Then you have the problem of all the dungeon and cave layouts already being known to everyone already, so you'd have to redeisgn those. Probably the routes as well. At this point, you might as well just map a new, fresh region.
Last point is that the idea of depositing all your mons between each region and getting a new starter seems pretty lame. Why not just replay the individual games at that point. People might say "yeah but muh post game quests that span multiple regions". The solution is to have you explore the regions out of order. Maybe you start in Vermilion City, explore a couple of the neighboring routes and towns, and then take the SS Anne to another region. Explore some of that, and take another boat to Hoenn. Redesign some of the major cities to include an airport and collect frequent flier miles as you bounce from region to region. This way you get a new story that takes the most advantage of having multiple regions.
