Realism tends to balance itself. Anyone who claims that game balance and realism are mutually exclusive is an idiot.
Good point of view, but sadly not true. There are so many factors that affect the battle in reality. Such as but not limited to: Strategy (marching armies, logistics, map related plans, mass fear factor), tactics (organisation and cooperation in battle), money (wages, repairs - this one is very important), morale (fear, bravery), stamina, conditions (weather), equipment (weapons, armor, horses), height adventage, fighter skills, luck, generals (influentive-wise and tactical-wise), artillery... I mean so much. We only have a very few of them in Mount and Blade, but even so there no one can claim there was a balance amongst kingdoms in history. Every invention and development the armies made, is done for getting the upper hand so it happened.
In short: Make katana stab 19p, the current one has it's uses but it's ridiculous.