Scrap everything and just implement a D&D system for all units. If there was a 4X Fantasy TBS with D&D units and combat, it would wipe the floor with everything else for that reason alone.

I appreciate a satirical comment as well as the next guy, but I don't see what's ridiculous about trying to close exploits?

I like the idea of armour degrading after each hit in a battle. Means even the strongest enemies can be brought down if you have enough units that will last long enough to wear away their armour. Could work nicely as the OP says.

I wouldn't have armour degradation stay after the tactical battle, that might be irritating. But armour with magic to absorb extra hits before it starts degrading could be quite neat.

You only need exhaustion. Bring in your energy bars!

tbh, most of suggestions i make for how to do the combat system tend to be D&D based; it's a very good system for this kind of thing. though there's some things i wouldn't keep (i currently like the distinction between dodging and blocking dnd lacks). generally though, the D&D system of random number + stat constant vs. difficulty just works, a lot better than 1DN.

I had fun too, though at some point it was clear I had won and it was basically just a repeated 'next turn' until the necessary research was complete for my Magic victory goal.  Once I successfully research Equipment (so I could build armored units) and Teleport (so that there was no longer any real worry about positional logistics), the rest seemed far too easy.  A horde of spiders is much less frightening when you know that they can rarely even hit you.

I still prefer the way Master of Magic did it:

Each attack point was a chance of hit, each defense value was a chance of defense.  This gives a nice curve of distribution of damage values as opposed to the version that Elemental had at release with the "I one shot you or do nothing" effect

10 Damage vs. 10 defense.  If each point of damage only has 70% chance to land, and each point of defense has 70% chance to work, you still have your 1 in a million opportunity, but it really is one in a million.  More realistically you most often see 6-9 damage vs. 6-9 defense, a.k.a. 0-3 damage dealt.  The odds of getting 10 on damage side would be 2-3%, and the odds of a 0 on defense side would be 1 in a few hundred thousand, for roughly 1 in 10 billion chance of hitting for full damage.

70% used as examples to show how you can tighten the equations to reduce chance but still have some give.  If it's more like 30% (which Master of Magic used baseline) you see much larger variance on damage and the uber hit potential is more common than 1 in 10 billion

This is the armor system Mount and Blade Warband uses. It's a quite good one, and similar to one described in a post above.

Slashing is used on fast high damage weapons, and they'll perform best against lower levels of armor -- but because of their high speed, good reach and high base damage output they're also generally useful in hand to hand combat.

Pierce weapons are best when they're slow and high damage -- like, say, crossbow bolts and arrows -- because the soak is decent and the percentage reduction is low.

Blunt is usually coupled with either crush through -- which allows you to hit through blocks with an overhead attack -- or knockdown -- which does what you'd expect. It's generally best on a fast weapon with mediocre damage -- since it gets hit hard by percentage, but slips right through soak. Crush through weapons are also generally very short, so you have to really get up in someone's face to pull it off. That said, if you can actually manage an overhead attack (the slowest kind) at close range, you've got a good chance of either killing or knocking down the target.

The system works well because it allows for lots of equally effective strategies that work in very different ways. Someone slashing weapon is going to focus on minimizing your ability to attack through blocking and lightning fast strikes, because their weapon takes a few hits to kill if the target is in decent armor. Someone with a pierce weapon is going to focus on hitting you hard when you're not looking -- and since pierce is often on polearms, they'll generally also want to maintain distance on you. And anyone with a blunt weapon is a madman screaming DEATH FROM ABOVE!