To some extent, yes it does.
Put it this way - if you feel like you constantly have to save and reload because even one missstep can ruin hours of play, psychologically you're on edge - not a pleasant experience for most people.
The converse is that everything is so easy you feel like you can click end turn repeatedly to win, removing any level of interest in the proceedings at all.
Clever game design that hits you with penalties for poor play, but not so crippling that you fear to take any aggressive or dangerous action is the happy medium - if you can play around the penalties, it makes the experience more engaging, as you have to compensate for your error.
The injuries system is a sound concept for two reasons - the first being that it carefully skirts the problem of losing a hero you've invested hours of work in, and the second being that it allows the AI to recover from poor strategic decisions to some extent.
That heroes are currently ridiculous is unrelated to the injuries system - an injury or two from winning a battle might be considered acceptable losses for capturing a key enemy city, while losing two heroes permanently likely would not - the first means the player likely continues to play uninterrupted, the second means a trip to the reload screen for a lot of players.