@SimonForsman well you could control only a little squad but then you lose all the other aspect of RTS games, such as resource collection, base planning, macro, which is great fun. Also people could choose do whatever they feel like, so if they want to focus on managing expansions while some other player focuses on harassment, that's a big plus. Managing battles is actually only one part of RTS. Another player could focus on unit production, while another player focuses on micro? I'll look into the way WoW manages player instances as you described. Ideally a player should only know about what is happening to his faction and what is visible on his map that is not covered by the fog of war.
You need to keep the amount a player can possibly know about very limited otherwise it will become impossible to host the gameservers (And possibly impossible to play for people who don't have fibre connections), if a player can control a distributed army he might potentially have several thousand units in view and you'll have to send state updates for all of them several times per second, (It will add up to insane amounts of bandwidth)