This is somewhat similar to the Northwest of the Far East Empire in a previous life, or the present-day Siberia of Russia. Although the conditions seem harsh, this was merely reflected in the climate. In eras with low productivity, it was indeed unsolvable, but after the advent of industrialization, its living standards were not necessarily inferior to other places.
Take the current Russian Siberia for instance. Siberia is indeed a "bitterly cold place," but the living conditions of Siberians are, in contrast, much better than those in Ukraine, the most fertile and warm climate region of Russia.
After all, the vast land and sparse population of Siberia provide abundant resources. In situations where resources are plentiful and the population sparse, the population itself becomes a valuable resource.
Moreover, the remoteness and harsh climate of Siberia kept it away from war in the past.
