I once suggested that the starting city hub (zmpire hub, whatever, just in the first city) would produce some gold.

Because at the time (in the beta) early gold was scarce, I suggested gold, but having the hub generate 1 of each early resource (materials, food, gold) would still be useful.

I remember being answered that in Starcraft this was not the case, though, so I'm not too optimistic about the team correcting this. It's micromanagement for the player and ai both.

Ive never seen this happen.

Well surely it could run out of population, and therefore not be able to build the workshop, meaning that if it had no materials it couldn't build a farm to increase its population, and therefore it would be stuck? (Haven't played for a while and can't remember if a farm needs materials or not, if it does then the obvious solution is to make it so that it doesn't, then the AI couldn't get stuck)

I don't think you're imagining it.  In another post, Frogboy said that the land one which the fertile land spawned was a problem.  I think in that case, the fertile land spawned on a Swamp, making it impossible to build on.