I think that's sort of the point though. In real life, and in tabletop fantasy, regiments and men don't fight to the last man except on exceptionally are occasions. The way to win any war is simply to make your opponent not want to fight it, and to win any battle is to make your opponenet run away rather than fight you.
I don't tend to find people flee ridiciously often in DO, they do flee, but under reasonable circumstances that semi accurately reflect the tabletop experience.
To move back on topic, I think Empire were intentionally made the strongest Race in DO. Because they were designed as the player race for the main campagin, they were designed to be able to win when outnumbered and outgunned. Can't really say no to mortars, steam tanks, grail knights, and wood elf archers now can we?
The best matchup is a harder question. I think Empire VS Greenskins. Largely because neither one of them has the fear/unbreakable mechanic. They are, 'Fighting on equal terms.' as it were. Similar in play style, but yet with completely different unit compostion.