I made a post about exactly the same issue the OP is saying and I still fullly agree. No game has really recaptured the "essence" of Master of Magic and I am honestly beginning to be doubtful that this game ever will. Maybe a MOD could fix it, but it is always better to have a quality vanilla in the first place.
There are many different solutions the devs could take to fix the fundamental problem of overpowered heroes. MoM did it in a number of ways and I strongly believe in the old adage "don't fix what ain't broke".
MoM's hero vs troop mechanics were as follows:
1. VERY slow hero level up. Heroes sucked ass early to mid game (except for Torin who should have been nerfed).
2. STRONG level distinction between low level troops and high level troops. A level 2 troop beat the heck out of a level 1 troop, etc.
There were what...only 5-6 levels for reg troops? And if you had a 6th level regular troop (a champion), it was just as badass as a strong hero. Also, the "warlord" trait for your "sovereign" would increase the level of all your troops by one, which meant a "warlord" really PLAYED like a warlord--massive incentive to get regular troops over other strategies. Without Warlord (and altar of battle which did the same thing), you could not reach this 6th experience tier for regular troops. In other words, you were excited about getting certain strong regular troops. The troops in FE are just plain boring.
FE troops get what...spell resistance? A bit of HP? A bit of spell mastery? (how is this useful for a spearman?!?!) upon leveling, which all in all means....not very much. MoM troops got more attack, more defence, which really started to show huge gains especially in large groups (anyone remember those 8-person group halfling slingers? 1 Extra attack meant 8 more damage!!!).
3. MANY different viable strategies. You can go magic heavy, troop heavy, turtling, expanding, pure summoner, pure warlord, etc. And you could beat impossible difficulty with all of them (though granted the AI was not the best in this game).
Also, the best point about MoM is that with good strategy a "weak" stack could beat a "strong" stack (to use FE terminology), but you would really have to think strategically about how to do this. MoM had very powerful support spells that meant you had to have a strong army to be effective overall, except for certain spells that were extremely powerful but that you could only get if you had a lot of picks in a particular branch of magic (at a sacrifice to other areas).
People have posted many different solutions to the problem but I think fundamentally the 3 points above MUST be addressed in some way whatever solution is picked. Please put some FUN into FE.