"The risk with that strategy is every city you ignore is going to start its own Uber clones, clones that are going to get favourable treatment from local regulators and be the favourites of local consumers."
Monopoly cities are by definition cities in which it's illegal to compete with taxi companies that have been granted status. Therefore no local startups, but if a major company like Uber can become well-liked by both customers and drivers elsewhere, voters in monopoly cities will demand change.
By that definition many of the cities in which Uber is currently deployed are "monopoly cities". It doesn't mean they can't operate, it means that they're vulnerable to fines, their drivers are sometimes ticketed, and they might even get court orders against them. But they often still find ways to operate.
Uber's problem is the regulator is more likely to look the other way for the local start-up, or they're going to make a hole in the regulations that allows the local company to compete but bans Uber. These kind of actions might be challenged in court, but to do that Uber needs to go into those markets and fight them.
I'm not saying that's the only valid strategy, they certainly could try to be the nice guy and only go where they could play completely by the rules, but I'm not sure that's the optimal strategy for their business model. And given their rep as a company I'm not sure they can ever really clean up their image.