I think there will be a lot of nations taking (your) diplomatic village offer. But a number of countries will have to think hard to re-invest in building their diplomatic/intelligence infrastructures again.

The area can be blocked off and secured for diplomat community (creating a special zone) and a high value target for terrorism or a complex and continually costly security operation for Thailand's police department.

Canberra (Aus), Wellington(NZ), Washington DC (US) and many more cities have diplomat clusters (districts) by design and by chance. These places are really lovely to drive through and see -- a tourist attraction!