If you are going to buff horses to realistic levels, you should make some penalties against full horses armies, to overcome the steamroll of knights that occur on most of the campaigns. Horses eat food too, they can forage it, but that means slower speeds of travel. Also proportions between infantry and cavalry aren't balanced to make a change like that. The ranks of infantry aren't massed enough to realistic levels, neither the speed/damage of horses, I think it's a good compromise for balance.
Moreover, horses at realistic speeds means more damage at falling, enough damage to make you unconscious if you fall into a rock or something.
Also horses are used like freaking hovercrafts, they don't get scared at pain, they react everytime.
I know that armored horses (knights) were one of the most effective units in the early medieval era, but armies weren't made of full knights for a reason. From what I know, knights were used mostly when the enemy was unorganized, or to exploit some type of breakthrough made in a pikemen or in an infantry wall. Dismounted knights weren't uncommon too. And the Mount and Blade name isn't a valid argument, because if we follow that logic, we should only play in calradia with khergits or swadians.