Part of the reason that heroes are so OP is that they can do massive amounts of damage. And I think that is awesome. Heroes should do massive damage (Someone keeps posting that animated gif of Sauron smashing people into next tuesday, please feel free to do so in reply to this post as well). Because the stack is so limited, any unit that isn't a hero is wasting space in the stack.
In fact, I think this is one reason why the beginning of the game is so good. You haven't had time to recruit enough heroes to fill the stack. So you have to rely on dinky mundane units to hopefully absorb some punishment. Scrapping against low level monsters with two heroes and a couple spearmen can be really hairy!
Later on, when your Sov has mastered three different elements and you have all 5 of your other level 15 heroes in your stack, you're basically unstoppable. Any units you add to the stack are basically meat shields to buy time for you to blast the crap out of the enemy. Because your heroes are totally badass and the units you're facing are not.
But watch that clip of Sauron. He is surrounded by thousands of soldiers! Sure he's in full butt-kicking mode, but is he going to be able to kill all those legions? Maybe not.
In FE, currently, heroes have to worry about 8-9 units of soldiers. Hardly the hordes that Sauron faced. So a couple big smashes and a fireball and the battle's over. That's not impressive; any hero that can't hold his own against 2-3 units isn't worth mentioning. If the opposing forces had 15-20 soldiers the situation would be far dicier. Get the hero to regular unit up to 5 or 7 to 1 and now you're talking! You'll need a couple first round fireballs just to have a hope of surviving.
If the tactical battle engine can handle it, why not let the unit count get a little out of control? A little epic tactical battle in the late game never hurt nobody.