Blah, Blah... boring, unimaginative players above.
If you you don't use commonwealths then you're missing a part of the game. It's not giving up production, it's being politically savvy. That is, if you choose to play in various styles of the game and choose to stay consistent within that style, you will get to a point where your # of colonies will be more than your current government can handle. As a result, many players just decide to choose whatever gov't type meets their needs to win the game.
Which is much different than playing and saying, "I'm a monarchy and my family and it's heirs will never relinquish power unless conquered or overthrown." Therefore, if I want to continue to expand my empire but don't have the requisite advanced gov't within the monarchy theme, I'll need to create commonwealths. Same holds true if you're trying to play as a values based democracy all the through to the end.
Another way to look at commonwealths too (and how I decided to first try to use them after thinking like the above players' posts), is that if you already have large number of planets to maintain, and a few more won't really make a difference, it's a bit like putting your colonies on auto gov.. Plus, they are loyal followers too, and will support you in a war. Therefore, in my opinion, it just makes the game have a little more political depth and interest.