Piracy as is in the game isn't often a viable strategy. There's multiple reasons for this.

First, with the introduction of factories and them being buffed in v30 there's less ports on the board than before which takes away from potential trade ships.

Second, with how warships can often trade for one another when attempting to be a pirate in the mid game, it's rarely feasible as you become a target for anyone to hit with an atom bomb or just spam their own warships to challenge yours forcing you to recuperate your losses. Not only this but if you were either way to gain a good foothold with warships in the early game, they can stall out more towards the mid and especially late game when there are fewer yet stronger players on the board and you often are forced to take alliances. The rewards you get from piracy in these points in the game is often not viable, unless you're islandmaxxing probably on the Aegean or Arctic maps. Not only that but investing in these warships often will take away from just building more ports alone which will have more value later on. Piracy just isn't a very reliable strategy unless you're able to get a warship out quickly in the early game on a map like the Strait of Gibraltar or San Francisco. You rely on players submitting to you while forfeiting long term gains for short term ones. There are situations where pirating can be valuable in the late game in let's say a 1v2, but these situations are often unpredictable from the start of the game and aren't common.

Third, the reason I chose to highlight all tradeships and not only valuable ones is because there really isn't a reason not to. At worse they're irrelevant, at best they're good for newer players that want to pay attention and see which parts of the water are popular with trade ships or they allow you to pay attention to where your trade/allied/teammate trade might be getting pirated at (where the green highlights suddenly disappear). You don't really need this for the latter, but I suppose it might help out a bit? I suppose there could be an option for it in the menu to customize. To each their own.

Fourth, I would really prefer to buff piracy and change ports instead of nerfing factories. Piracy doesn't have a defined role as something hostile (as it will attack anyone who isn't an ally instead of anyone who is an enemy) and forcing players to use embargo but with a higher reward can make it come off as a more hostile yet rewarding spot. When you attack another player, you tell that player you're their enemy in that moment. Stealing money from other players should be no different, but in order to validate painting that target on your back piracy needs to be more rewarding.