It doesn't erase member worlds, but it does force conformity to a greater degree than I think I would be comfortable with, and fosters a relationship of dependence upon a central nexus rather than alliance between equals. I, for one, would rather be approached to be part of an alliance, NATO-style, than actually become PART of an organization. (DON'T get me started on the UN.)
Which is why, as much as people like to bitch about the Federation being out to unify the galaxy, they're still better than the Borg: Foreign states DO get a choice in whether they want to be Federation Members. There's no evidence that the Federation has ever made anyone a member by force.