I agree with your assessment, but I am afraid your solution won't work the way you intend to. You're just looking at kill rates, but other factors are also important. Morale is influenced by covered and uncovered flanks, missile fire, others units routing, etc. If you reduce the kill-rate (by lowering attack) and the base morale but leave other factors the same, those other factors will have a greater effect. My guess is that you turn battle into a rout-fest: if you can get one of the opponent's units to rout, the morale penalties on his remaining units will become so big that he cannot win anymore.
In other words: a simple reduction of base morale is not sufficient, we need to rebalance the morale system. But as far as I know that's not possible in the M2:TW engine.
Also, there's the standard question for modding TW game: how will the A.I. respond? I predict that he won't be able to deal very well with his now-fickle armies. I also fear that it means we need to beat the same A.I. army several times over, because the A.I. won't understand that it has been beaten.
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