I think they mean to be realistic because of the fact that often the loosing side of a battle (at least in the Napoleonic Wars) would loose like 10-20% of their army and the rest would just run away. What they don't factor in is that the armies ran away and didn't come back six months later. Many of the troops deserted and after loosing often more men were killed of starvation and weather because of lost supply lines etc... They also don't factor in wounds in the game.
What ever the reason it is really frustrating.