It's much more complex than that, and I'd have to write a long explanation how the autocalc scripts work, and how the engine works, which I don't have time to do.
Yes, but... the alternative is not pleasant. It requires complete rebalancing of the parties and the strategic events, and tons of scripting to calculate troop strength according to skills, attributes and equipment. And even then those calculations would only be marginally more realistic than the present, level-based ones. I've done that before, so I'm talking from experience (PoP's autocalc).
Debates are nice, but real work is something else. But if it's in your power to deliver a magical solution, complete with scripts and party templates rebalanced after hours of playtesting, please do so .
You don't necessarily have to make it check skills and stats and equipment and everything. Even a strength boost based on the type of troop would suffice. After the in-battle equipment gets balanced where you want it, just take that same basic idea that drove the equipment balance (say you wanted one elf to equal two goblins or 1.5 uruks or whatever it is your goal is) then add in a modifier to the battle script based on that and adjust the party sizes based on that. The equipment balance is the hard part - after you have it balanced where you want it all you have to do is run a few test battles to make sure it's working right, then use those numbers to work the auto calc.
For example, if an elf party is supposed to be evenly matched with a goblin party in a world where elves are worth 2 goblins, just have 60 elves in a party and 120 goblins in a party. Then make the battle script count adjust the strengths accordingly so that it kills off an average of 1 elf for every 2 goblins.
It has been considered and deemed impractical. There is no mathematical model that would replicate the results of a battle, other than playing the battle itself. No, really, there is not. Pick up the module system and try it for yourself, or think about the many different scenarios for a while.
I know it's more complicated to make it perfect, but it doesn't have to exactly replicate the results of a battle, just be closer to it than straight up calculating based on levels and such.
Heres a simple example that would probably give good results: If, after running some test battles, you get the following values for approximate casualties during some fairly evenly matched battles (this assuming you have your equipment balance done enough that you can actually set up evenly matched battles by adjusting the numbers up or down on the two sides).
Elves of Lothlorien: 2.5
Dwarves of Erebor: 2
Men of Rohan: 1.5
Uruks of Isengard: 1.5
Orcs of Isengard: 1.2
Orcs of Moria: 1
Orcs of Gundabad: 0.8
In the script where it calculates party strength for the battle (and for various decisions, so it's pretty catch-all) just apply that modifier to the party based on the faction of the party (most parties keep their own faction troops in this mod, and you could add other checks to have non-faction troops rescued sent to their city or something). That way it assigns a higher value for the troops. Then where it calculates casualties, multiply the losses by the strength of the party they're fighting.
That should make it so that a party of 60 dwarves will be detected as equal to a party of 120 orcs of moria. In the actual battle, it should inflict twice the casualties on the orcs as the dwarves.
Granted it won't be perfect and it won't catch everything, but it'd be closer than it is currently.
If you wanted to be able to handle mixed faction parties (like the player) you could make a script that counts the amount of troops in each faction present, multiplies it by their modifier, adds them all together, and divides it by the total troops in that side of the battle. Casualty inflicting might get a bit wonky there sometimes if it randomly assigns the casualties all to either the low end troops or the high end troops, but on average it should work out.Just to remind you that you are trying to argue with the guy who knows darn well how to code autocalc, had first hand experience, and abandoned the idea.
I for one, immediately see flaws in your "Heres a simple example". Main one being - factions are not uniform within, all troops are different. They are different on different terrain, in different compositions, on different battlesize/tactics. Throw in couple more factions, and you look at serious matrix of possiblities in party vs party encounter. Throw in 19 factions in TLD, and you are lost forever.
TBN, current level based calc captures more than your example already, cause level is naturally bigger for better troops, and we adjust it, taking into account both calc and training time.