It should always be a no-brainer to upgrade your troops if you can afford it - that's why it's called an "upgrade" and not a sidegrade.
I disagree to be honest. If the result of battles is this easy to determine then it might as well be autoresolved.
I've said this a trillion times elsewhere but my favourite battle system is Rome 2 Total War. The expensive units in that game are extremely good, but only when supported by cheap light units. The cheapest spearmen can out-manouevre and javelin elite cataphracts to death, and the cheapest slingers can beat the most expensive infantry. You end up with about 20-30% of the army being heavy infantry, with maybe just one unit of elite infantry.
The problem is that battles in bannerlord are mostly just doing as much damage as quickly as possible. Flanking does almost nothing and wastes valuable grinding time, rear charges just get your own cavalry killed, the only tactic that reliably works is to mass archers and kite the enemy in front of them.