I think the biggest issue is, at least in my game, kingdoms are always at war with each other. I joined a kingdom as soon as I hit clan level 2 and that kingdom was at war with another kingdom even before I joined. Many in game years have passed yet they still haven't made peace. You can't even suggest them to make peace using your influence. That option is grayed out. My guess is, they will fight until one of them simply disappears.
Even in Warband, kingdoms would make peace after a period of fighting. This is why snowballing would take a lot of time. It wasn't like in Bannerlord, where I am sure same two kingdoms will keep fighting until one of them is completely gone and the winner will immediately start fighting another kingdom.
Correct me if I am wrong, but in Warband, losing kingdom would send peace offers and winning kingdom would sometimes accept, I doubt this is happening in Bannerlord, because they always fight until they die out.
This is a weak point of Bannerlord. AI doesn't know how to surrender. You can have a 500 man army and fight against a group of 5 but they are not smart enough to be scared, you can shout "SURRENDER OR DIE" again and again, but they will threaten you and still try to fight you. It is ridiculous.
I think the line of thinking behind it was "i have the advantage, why should i stop", it's certainly what the player would do, let's face it, as soon as you get your own kingdom in Warband it's just one war after another with barely enough time to garrison the conquered holdings, mainly because the AI will declare war on you for being unworthy to rule, and straight at the point when they recognize you are worthy to rule they start declaring war on you to curb your expansion. Issue seems to be that in Bannerlord every AI will do what the player in Warband would do, and get treated accordingly, if they are winning why should they stop, if they are loosing they may want a truce but if they can't turn the tide(which, for reasons mentioned in the OP is difficult, since loosing one or two holdings will cripple any faction) there is no reason for the enemy to accept. Its very logical really, under the circumstances, the machine is not broken is what i'm saying, it's doing the logical thing, but in the process the player is cut out of the loop.