I pretty much expect some clipping in any 3D game. It usually doesn't bother me and I barely notice it. However, if it happens repeatedly over a short amount of time and it's very bad it starts to get to me because I can't focus on the game play if all I see are errors.
I haven't played TS4 yet (obviously), but I've seen a lot of atrocious clipping over short periods of time in the videos. I'm aware that these players say that this was not a final build, though, so... *shrugs* Would I rather have clipping or routing failures? I'd say neither because too much of either is irritating. However, if it's down to bad clipping 6 times in a 10 minute span or 6 routing failures in a 10 minute span, I guess I'd take the clipping.
If clipping is their fix for routing issues, however, that sounds rather uninspired to me.