I'm hesitant with this kind of "crowd control" of mega stacks. You'll end up with all kinds of squirrley ways to game it. You know, breaking armies into smaller stacks, then insta-combining them right before a city battle to have a mega stack, then break the stack apart after.
What we need is game mechanics and incentives that encourage the player not to have 1 mega stack. Make more strategic objectives in war beyond simply grab-the-capital-yay-I-win or kill-the-sovereign-yay-I-win. For instance, give a defender in war a decisive advantage while fighting on their home turf via something like "linked shards." While the defender is in their home range, their sovereign and other magical heroes could be highly powerful--- however, neutralize the shards and the sovereign becomes much more manageable. This encourages the invader to strike at multiple targets with multiple armies and also encourages the defender to defend those sites.
This is just an example, but it's far better than gimmicky spells or hard coded caps. Institute a cap and all we end up with is players stacking bigger units into a mega stack rather than simply bigger numbers.
Those are very good points, Demiansky. Well said indeed. 
Also though, we have to look at the "Epic" nature of what's being emulated here. Two things really. Fantasy Worlds and Games, and Warfare. In War, numbers matter. This is a rule in Real Life. If you want to win a war, have more soldiers and better weapons then your enemy, or you'll be killed and wiped out.
The source material that has inspired Elemental and games like it in the past come from "Epic" stories and "Epic Wars". I'd call WW2 pretty "Epic", right? How many ships was it that landed on D-Day? What other "Epic Wars" can we think of through-out history? We've got the "Trojan War", that launched the Largest Fleet man-kind has ever seen (with the exception of D-Day I'm sure). We've got the 300 Spartans defending their heritage against 500,000 Persians. I can go on and on with "Epic" examples here.
Now lets look at our Fantasy source material. Well, I can't not say LotR or someone would try to kill me, so...LotR. We have stories like "Dragonlance" and magic and monsters from "Dungeons and Dragons". We've got things from Fairy Tales like Giants and Unicorns and Witches and Wizards and all that stuff. To some person or another all of that stuff is "Epic".
We all want Elemental to be "Epic" don't we? I know I do
. That means we need a game, and a War, on a EPIC scale. That means Huge Monsters, Massive Spells, and Huge Armies that number in the Thousands!!!!

EPIC!!!! FTW!!!!!
No Limits, Brother, No Limits. 