But some of the units affected are pretty advanced units themselves (pikemen and musketeers). It is also very costly to upgrade them, since you have to build armorsmiths to do so. I want my money's worth really. In RTW, smiths upgraded every unit produced or retrained there. So catatanks with 21 armor got +2, peasants with 1 armor also got +2. In M2TW, you only get upgrades if your current armor is lower than the level of the smith. This suggests that armor upgrades are supposed to bring weak militias in line with tougher professionals, at least in terms of armor. It will hardly make them uber, since professionals are still better fighters (higher attack and def) and have better morale and perhaps collision mass. But as you can see, the armor upgrades are inadequate and the upgraded units are significantly weaker than they should be.
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