Also engineering issues
Using the extreme example we're discussing, i.e. a "city planet" similar to Coruscant in the Star Wars movies or Niven's Puppeteer homeworld, such a construct would definitely screw up the natural ecosystem.
It would require fusion power (at the very least), artificial ecological management, food and waste recycling, and heat dumping methods, as though it were a giant spacecraft, and not a normal planet.
If one has the tech to do this, then why the hell use a planet that already has a unique ecosystem? Mars has as much land area as the Earth. Plop a world city on that planet!