+1 for me. But I am in my third playthrough trying to figure out what is going on. At first I thought it was just terrible AI decisions and a design oversight, my first 2 games were before patch e1.0.2 and the glaring issue with snowballing was mass desertion for losing factions causing them to lose majority of their cities, clans and territory within a very short time. But e1.0.2 seems to have addressed the constant desertion for factions losing wars, it still happened but in my now 14 hours staring at the screen trying to figure out what is wrong the mass desertion is just a symptom of the real issue.
Bandits. With the new army system when a army suffers a major defeat the lords simply can not recover their numbers. When a lord is defeated, captured, ransomed or escapes he starts back at square 1, just the lord. This is where the problem lies, the lords recruit the same way as the player, running from town to town trying to recruit and more often than not with the overwhelming amount of bandits scaling with the players level, they are are driven away from towns and cities once they leave, never getting the chance to regroup into a sizeable army and more often than not getting captured and starting the process all over again.
Bandits need to be adjusted. Either by adding manhunter packs, not scaling them with players level or something.