I don't really see much of a true negative impact from lower prices across the board.
Lots more full stacks running around(and i mean a lot more). Units dont need lower prices, the ai can recruit devent armeis with the few tweaks i said. Lower unit prices will just provide a surplus of cash for the player which the player will spend on paying other factions for example. The ai doesn't do this, it will just churn out as many troops as it can. If you want lots and lots anf lots of armies then lowering unit prices will do that, but if not there is no need to do it.

To add my opinion to Lusted post above, have you consider to make some of the castle units available in city? For example, city can recruit DFN but with much smaller pool (1 max) and lower replenish rate. I find that helps the factions that only control city and they have no way converting their city to castle. Now they are not forced to employ all militia army any more.
But that removes one of the big differences between castles and cities. Personally i just raised the amount of units recruitable per turn in each castle level so the ai produces more castle troops.