I voted no, but if we remove the division limit cap, then there absolutely has to be tweaks to the other constraints. 30 full strength divisions is ~200,000 troops. Maximum CSA end of year army size was actually 464,646 in 1863 for the CSA. I'm not sure how many of those were effectives in the main "armies" though. 200,000 seems somewhat low, but within reason to me. I've never been able to get to 60 divisions as the Union so I'd say they have less men in the field as well than historically. This isn't really a bad thing since no players actually garrison like the forces did historically. Giving them historical force levels would just end up with all of them on the front lines.
Now on to solutions. A straight penalty to CS points wouldn't be ideal. I think the forces build up at about the right speed until sometime in 1863. (the Union may be a little slow) One thing AACW lacks is a way to simulate the exhaustion of manpower in the later years. As it is now, just keep a good NM and you can draft/volunteer to your hearts content. Some type of conscript point penalty based on overall casualties and lost capitals seems like a start, though I'm guessing that's more of an AACW2 feature at this point unless someone can mod it. Clovis had mentioned something like this for his SVF 2.0 mod but he's AWOL and who knows if that will ever come out.
Maybe an easier solution would be to add penalties to the conscription/volunteer options after a certain date. Preferably tiered in some way.
Anyway, I don't really care about the method, I just want a realistic amount of combat troops on the field. Division limits accomplished this to some degree, but there's a more flexible/artisitic approach out there somewhere.