I think it would be an interesting thought experiment to brainstorm a set of desired characteristics, then chart possible routes to them.
I’ll start:
Aim - no obsolete units.
Possible methods:
Gate higher tier units by cost (e.g. population as a resource for demonic units) building requirements;
Design higher tier units to be side grades instead of straight upgrades (e.g. how the shrine of smiting scaled off the number of devout units)
Methods to upgrade lower tier units, e.g. lowering their cost as the game goes on, or soemthing like cosmite which amplifies unit power but costs more for unit tiers.
Tweak upkeep costs, same as purchase costs.
Remove the tier system entirely and have all units follow upgrade paths similar to how battle brothers works, but on a larger scale.
Go for a more modular unit Design system like in Endless Legend, so races get blank units and the costs scale the more stuff is added to the unit, e.g. have mounts cost 100 gold, so a unit that is allocated a mount now costs +100 gold.
Have units that serve purposes not just in combat, for example how in Dominions your mages affect your research rate.
Byild more support units ==> increase your research or mana generation.
A logistics/supply system, e.g. food, that favours lower tier units (horses eat so much more than humans…)
Edit: another idea:
Change battle system to shift the point at which higher tier units provide more bang for buck.
Currently, in AoW3, with 6 units per stack and the adjacent hex rule, it is very difficult to leverage the economic advantage of lower tier units.
It is much easier to have a 6 stack of Manticore Riders than it is to have the equivalent cost in Pikes and Archers, which would be 6 stacks, even though that later combo will win.
One possibility would be to remove the hard unit limit of x units per stack, and link it to supply and morale mechanics, so a larger stack uses progressively more supply/upkeep etc.
In other words, you could theoretically have a stack, or army, of 50 units, but that would require more upkeep than 10 armies of 5 units each.
This reflects, to a degree, real life logistical issues where the more people there are in one area, the harder it is to service them.
For a holidays relevant example, try cooking Christmas dinner for 3 people and then for 15.
Your energy costs are 5×, but your cooker capacity is not, and you probably don’t have 5*the number of plates, cutlery, seats, table space etc to hand, so one more thing to consider.
You could link this supply system to the sector system, so each sector produces x amount of food, some uses by the local city/citizens, and more used when an army is in that sector.
So the bigger the army in the sector the faster the food goes.
So, a big army in a desert sector ==> problems! Which makes an intuitive sort of sense to me.
This also opens up more distinction in units. Some units would require more (cavalry)or less (peasants) food, or maybe none (undead)