Outside of organized leagues, almost all PP racing online are short sprints of less than 10 minutes and without tire wear and usually on RS tires. By encouraging people to use lesser tires all it does is create an imbalance on the track. With less grip, to even out the PP you have to have more power. So you corner slower, and go faster in a straight line. I'm not sure how that could possibly make for better racing online when it's already atrocious with everyone on the same tire. IMO it's one of those things that sounds good in theory but in practice doesn't really pan out.
Yes, with everyone on RS tires, and that is so much of what is wrong with online in this game/sim. As a sim, the point is to drive (virtually) real cars in a real way. Who wouldn't want to take their favorite car to a great track and just wring it out? But if you put F1 soft tires on it, well, it's not the same car you drive on the street, so it's rather meaningless really.
But that's a different thought - as hard as it is to find rooms with SH limits, assuming you do... what I mean is that a car that is 500pp on CS should not be 500pp on SH. In fact, given that PP is supposed to be a unitless measure of how fast a given vehicle will get around a theoretical average circuit, thereby allowing direct comparison and, supposedly, allowing for close matchups, slapping on grippier tires completely destroys that. (lets just ignore the ringers like the GSX-R and such for now anyway) The basic theory behind it is (or was) that I'll take anything I like, and you take anything you like, and if both are 450pp, we should be in fairly evenly matched vehicles on a course that is equal parts tight corners and fast sections. Maybe yours is better at the corners, mine is better at the fast sections, but on a track that is a balance of the 2, it should be a close race. But.... if I can put grippier rubber on (and you may not want to because it may ruin the balance or pleasure for you), then I can counter-act your advantage. But then, I'm not really at 450pp anymore, in actuality anyway, but the code doesn't penalize me appropriately.
If tires were counted (along with aero), you could have some quite interesting matchups. Taking beasts and putting them on slippery rubber to compete against less insane cars on grippier rubber, etc.
Not that this would fix the system. It's broken far beyond that, but it would make it more like what it is supposed to be, and therefore, better. It's hard enough as it is to get decent matchups online with the unwashed. That's down to the combination of limits of what the host can set for the room and the masses doing anything possible to game their way around those limits.
Anyway, I just wish it included that stuff. Would make much more sense. :/