If I may be so bold and weave some shameless promotion into my post: Check out the link in my sig, different victory conditions are actually workable in M2TW.

Now, on topic: I totally agree. In my opinion there would be two possible ways to go for this.

Way 1: Introduce certain victory types. This is the style that you see in Civilization games and close to the opening post. The advantages with this is that you sometimes get surprise winners you didn't expect if the conditions are done well and that you can put in a decent number of things that determine victory; thus it is very good from a strategical gameplay point of view because it opens up quite a few different paths to victory. The disadvantage is that the victory conditions still need to present a large threshold so you don't win immediately. Small stuff won't be considered at all. In addition, the winner doesn't always have to be a dominating faction, nor does a dominating faction have a guaranteed win (although you could say that this is a good thing).

Way 2: Use a scoring system. This system would monitor a faction's progress in numerous ways (you could for example score points for good diplomacy, missions, etc.) In the end, you either set a key date at which scores are compared or you set a score target which would allow for shorter games.
This system wouldn't allow for real surprise winners; conversely it would require the winning faction to somehow dominate the game. As a last point it's always fun to race against the AI in the score.
This is the way I'm implementing in my mod by the way because it's easier to do. I'm not sure which of the two approaches I'd prefer but I think they'd both work very well with their own distinct advantages and disadvantages. From a gameplay point of view I'd be slightly in favor of #1 but on the other hand I'm sometimes annoyed if the AI pulls off a surprise victory against me