You're right CC, a lot of the problems with this lie with Communism itself and the way it uses forced labour as opposed to paid.
I found one way around that was to create a similar Government which used paid labour instead of forced labour... called Socialism.
At present 1.21f will still be different to 1.16f since in that patch the citizens sacrificed were the unhappy ones, so no unhappiness was ever transferred to the populace as a result.
I would still like to hear an official statement from Firaxis on this though, even if it just serves to clear this matter up. You see, for me, the self destruction of the AI was by far the worst aspect of 1.17f and made the late game far too easy and hopelessly uncompetitive.
Just going to war with the AI civs, would be enough to win the game as they all soon go Communist and sacrifice their cities to size 1, permanent unhappiness! The German's could offer some resistance as they'd always prefer Monarchy over Communism.