Wow. So much disdain for Merc camps. Why hasn't SD noticed this underappriciation for this currently developed mechanic?
Imo, having a mercenary camp of any kind should be OPTIONAL as to whether you want to have a troop produced.
To build a unit, there should be a button on the camp that does so. There should NOT be auto-building of units....EVER.
The stats and upkeep of the unit should be properly displayed BEFORE a build occurs so that the player can make an informed decision as to whether or not he wants the unit. The upkeep should vary, depending on strength of the unit and type of unit....yes, magical units like dragons SHOULD have mana as part of their upkeep.
There should be a build TIME associated with building a unit. Selecting a unit for build should open up a mini-queue that clearly shows the time in turns it will take to produce the unit. Different units SHOULD take differnet amounts of time to complete.
The question as to whether or not these camps should have a capacity limitation is still open to debate. In theory, a natural upkeep softcap should keep the player from going overboard on these mercenary units, but at the same time in having the upkeep too high, you drive the player away from wanting to hire these merc troops altogether. Not sure where this one should go. I would however open up the idea that there should be a GLOBAL cap placed on these camps. Each camp can manage 3 units that get added to the total. EXAMPE: if you had a dragon roost and a orge den and a mite camp, you would have a total of 9 mercenary units able to be fielded. Yes, that means that you can have 9 DRAGONS if you chose and decided that you could afford the upkeep.
These camps should be upgradable. PLEASE. Have the upgrades asscociated in requiring the preequisite techs (perhaps Drills and War Colleges). They would upgrade similar to shards. The units SHOULD be competitve with the upgrade. Already....who REALLY gets mites?
Additionally, there should be MORE variety of camps. I would LOVE a Griffin Roost (Griffins fly) or a Unicorn Grove (Unicorns Teleport). I would be thrilled with a Demon Portal or a Chaos Crevace (Hell Hounds). I dare say, mercenary armies should become a POSSIBLE viable strategy in the game as to how a player may wish to defend his boarders!!!
As a final point, I would be quite satisfied if a limitation were placed on camps such that you require a 2-tile buffer around and cities cannot envelop camps as a result.
Thoughs? Comments?
Summoning should be another avenue of strategy in which to build your army with. This area needs alot of work too....but that's another topic that's been talked about in other threads.
This is exactly how I feel on every end. We need to know the upkeep costs, control building the units.
I prefer having the units unlocked in Unit Design.
This means I will have "Build-A-Dragon Workshop", and it will be FUN and EXPENSIVE. What else will I do with all my late game money? I will be able to make Butcherman, Elementals, Mercenaries, Knights of Aosk equipped how I want them. Because these are UNITS and not Henchmen, there is no need to give them level up perks.
I would have the Resource (Dragon, Knight of Aosk) added. It would give 3 copies of the resource. When you build a Unit that consumes that resource, you lose it until the unit is Disbanned or Killed. You could implement a Civ Trick that if you "lack" a resource required for units, the unit has -50% Defense.
* The purpose is I can make my Dragon serve as a Fell Dragon Mount, Or as a Fell Dragon Unit. Either way, buying the "item" Fell Dragon Mount from the Shop or building the Unit would remove a copy of the resource and add to the Limited Unit Cap.
* Make it so that the item "locks" from the shop when Limited Unit Cap is reached.
Limited Unit Cap works great if you don't want a limited resource, just have the Improved Resource give LimitedUnitCap and add the unit to your queue.
Is this moddable as is? If so, consider me working on it over the next few weeks.
If not, I would want it moddable, so that I could make my Draconic Henchmen of Draconia, led by Zaraloth the Dragonlord. 
Regarding design philosophy: Early game, and mid-game is where rules matter the most. End game is where rules have less meaning (unless they restrict you from something) and technicalities (functions) are more important. So let the insane big boy 4x things happen.
For that matter, edit that Master Quest boss to rid his stupid dragon's weakness to ice, give it more defense, and dodge then give it 2 actions per turn instead of one. Then you will have one serious bad boy at the end to justify his defeat ending the game. He should be hard.