I don't see any way for less casualties with the MTW2 engine. The after battle options can be re-named to- worthy foes go free, ransom/lose all arms/armor, enslave. Or something like that. So if the faction has enough money/was well enough armed to pay the release of its men they might fight again otherwise enslaved. Since many armies which ran away or were defeated lost all of their arms/armor which might have been passed through their families and been a significant expense. Maybe they would fight again but often not for many years. The engine assumes all men who survive are instantly ready to fight again and the AI is not going to disband any units whereas historically unless it was a genocidal war the men wouldn't often go right back to war after a major defeat. Since population isn't lost with recruitment in MTW2 I don't see a major problem with this.

Having any results like the 15-30% losses of many battles in antiquity versus the 60-100% losses of current losers would mean having to radically change the morale system which I think would make for more boring battles.