This teleport issue has been discussed extensively in a number of threads over the past year or so.  For me, the bottom line is that if a player wishes to exclude teleport of armies from the game, the solution is rather simple.  Don't learn the spell, and don't cast it.  The AI, last time i played, doesn't use it, anyway. 

A compromise, which has been suggested to SD a number of times, is to increase player customization of the game.  A simple set of check boxes available as apart of the set up of a particular game would address this so easily.  Give players a choice of opting in or out for certain spells, and other things for which there is significant differences of opinion  in these forum.  Why must it be all or nothing?  Teleport or no teleport?  Just make it in option at setup, make everybody happy. 

Champions teleporting i don't mind. But large groups of soldiers I thought it to be a lil unrealistic. Now if a faction as part of this specialization had teleporting in a manner similar to what the OP suggested, that would be cool.

realistic?  ah, ummm, isn't the whole game EWOM based on 'unrealistic' things?  Its an alternate, fictional reality.  We make of it what we wish, (or what we can get the developers to make of it).

I'd say that army gating should be a lvl 5, 500 mana spell.

Low-lvl teleport should just be for sovs/champs.

Brad made a big deal during the WoM beta about how nothing could go into the game if the AI couldn't handle it. Looks like that still hasn't manifested even so long after release.

Absolutely.  The best games have two things that relate to this discussion.  1) Lots of 'interesting' choices.  That means teleporting should entail some risk.  And, of course, the 'more' you teleport, the greater the set of risks, and well as benefits.  Interesting choices leading to interesting decision making.   2) maximum player flexibility in -- customizing --  the environment in which one will play.  many features should be accessed with an on/off, or sliding scale, upon set up of a game.  This applies to teleporting, as well as many other major 'aspect' of the world one is about to create and play in.  How many and how tough will the bandits be?  Use a sliding scale to set it.  How many, how bad wild monsters?  Sliding scale to set it. etc.   Want to play in a magic rich world?  Set the sliding scale.  What to play military / economic without magic?  Adjust the sliding scale.  What to play in a desert or a well irrigated plains, or forested landscape, well adjust the sliding scale. 

While the games back story is about a few great mages that can channel water and food and bring the dessicated land to life is wonderful.   Why limit the game engine and world creator to only that desert experience?  Allowing player customization of these factors will extend the lifespan of the game, and enhance re playability way beyond what might otherwise happen. 

I like the idea of a 'teleportation sickness' debuff that puts you at a disadvantage if you intend to fight in the next few turns.