I do not agree that the lifepoint regeneration should be set much higher. If I understand your story well, your militia came one by one in battle to the eneny scout (wich unit you did not make clear, but even that does not matter).
When following the orginal KaM battle statistics (I think the remake is quite the same), there is a change your soldier kills your enemy's soldier lifepoint, till the soldier loses all lifepoints and dies. So a militia could kill a swordman, however the change is unlikely.
In this scenario, the change that you would lose all 3 of your militia is uncommon,
but can be possible. To me that is quite realistic. A soldier that is supposed to last short, can fight possible longer than expected.
I do like that, because it makes the battlefield a little more varied + it is more realistic than you think it is. A one against one battle is quite different than a big army against a big army. Every general [I suppose you could call yourself that
] should know that a brave soldier alone could do strange + rare things. This is quite common in real life, otherwise there wouldn't be those stories about hero's.