The concern I have with both sides being stronger is the war is likely to be much shorter.
In canon, neither side really had enough units located in one place at the right time to deliver a truely decisive stroke. If all sides are stronger, it's much easier to exploit any weaknesses in the enemy and potentially surround and eliminate a large proportion of their strength.
Weak, diffused armies might not be all that realistic, but they're certain to keep the war going from 1996 to 2000 and beyond. Screw around with that too much and a five year conflict is suddenly all over in about five months.
Also political aspects cannot be ignored. Many otherwise sucessful campaigns over the centries have been hamstrung by politics back home. Take early WWII for example. Europe was effectively smashed and Britain had virtually no hope of suriving - and then Hitler decided to split his forces and invade the USSR, reducing the pressure in the west and giving the allies more than a snowflakes chance in hell of actually winning! (yes, I've simplified it a bit, but you get the point).
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