[thejeff]

Obviously, it can work either way.

An invincible attacker who just hasn't managed to kill off all the defenders before the time limit. Or a trapped and helpless attacker who's tough enough not to actually die before the time limit. Or 2 berserk SCs hacking at each other but unable to do any lasting damage.
Extending the time limit would help resolve some situations, but not all.
Any solution fails in some circumstances: Auto-kill kills those who clearly were in no danger. Auto-retreat can save those who had no way to escape.
Auto-retreat seems a marginally better solution to me, but it also requires code changes and isn't likely to happen. The current auto-kill solution isn't much worse.

As an aside, I have certainly seen both sides rout. I'd always thought it went attacker routs, defender routes, then auto-kill if that doesn't work.