[jp10]

I agree that it is a very 'sliding scale' type of approach. Historical battles could more easily be analyzed to use this method as a rough guide to determine victory/defeat levels by casualties rather than victory points.

To increase casualty effects in the game currently a creator must edit the units to increase a loss effect to be greater/less for a particular side.

It could be done easier if an option in the game could be added during battle/scenario/campaign creation to add/decrease victory point modifiers between the forces to give more/less weight to casualty points for a side or even a 'political effect' modifier to reflect external support or even world reaction to a conflict.
This could offer battles that a player could tactically win but suffer defeat or draw in a larger context. Could add three victory results? Military (or tactical)/Strategic/Political ? Decisive Military Victory/Strategic Draw/Political Minor Defeat ?