Our organization has several hundred FogBugz users in various parts of the world, so allowing our Project Admins to create new projects on a whim would be a very bad thing for us. We exercise strict control over site administration and creation of new projects to keep things manageable.
However, I understand your desire to allow non-Site Admins to create projects, and I share that desire; the difference being that my proposition does not involve elevating privileges of Project Admins.
My opinion is rooted in the belief that FogBugz' permission structure is too coarse, with the all-powerful superuser status, "Site Admin," being required for too many routine tasks. This solution, while by no means infallible, is based on considerable real-world experience with FogBugz on an installation with dozens of projects and hundreds of geographically scattered users:
I propose that Fog Creek bring back a modified variant of the old "Group Admin," but as a full-fledged user type that would sit between Project Admins and Site Admins, and allow them to CRUD projects and groups, but not interact with anything else in the Admin menu. To complete the scheme, also include a "User Admin" user type, which would inherit all Group Admin privileges, plus access to the Users interface and the ability to CRUD users; the User Admin would therefore sit between the Group Admin and the Site Admin. In descending order of privilege, the full list of user types in this proposition are as follows:
Site Admin > User Admin > Group Admin > Project Admin > Normal User > Community User > Virtual User
To illustrate, here is a partial mockup of the proposed New User screen:

A User Admin would only be able to set users' user Type to Normal, Group Admin, Community, and Virtual, but NOT User Admin or Site Admin (which would be the sole privilege of Site Admins).
These changes would ease all of our present challenges with the permissions system in FogBugz. Specifically:
It neatly handles the issues of project-, group-, and user-level administration, without requiring that so many users observe protocol and fully appreciate the impact of global configuration – configuration that really shouldn't be touched except by a select, trained few.
In breaking down the Site Admin role, delegation of many more tasks becomes possible. Currently these tasks must fall on the plate of one of the few full-blown Site Admins in our organization.