DaRKSTaRxMeRC:

Covenant units are fairly easy to reproduce due to their economically inclined pricing. The fact is, all-game-long they will be using units of varying veterancies, minimum 1 star, Most often 2 star, and maybe 3 star.

Regardless of whether you would have to wait (for your older units die) to get the higher veterancy, the covenant will now get way more bang for their buck.

But once again maybe it will be fair (up to 2 star veterancy but no higher) considering that they have no leader powers.

Keep in mind that upgrades give better bonuses to single unit types, and retroactively.  Take the Banshee, probably the best all around covenant unit.  Which is better, spending 200 to give it all Banshees a retroactive 25% increase in effectiveness AND a new ability, or spending 1000 to give all future Banshees built a 25% increase in effectiveness?  Even after you take into account the 1000 affecting other units, you have to be using a fairly diverse force, and actively building units the whole game, for the second temple upgrade to give a better pay off.  This applies doubly so for the third temple upgrade, which requires you to build a large enough force to hold enemies off while you save up a whopping 2000 resources, only for it to not benefit a single unit in that force.  Not to mention, if your temple gets blown up, you are back to producing 0 star units.

I do suspect that this system would encourage Covenant to play aggressive to the USNC's defensive.  If both sides simply build up to max pop, the majority of the Covenant units are still going to be only 1 star.  It makes sense for the Covenant to wage a war of attrition, as their replacements will be comparatively better.