This example is of a commoner "rebel" army successfully ambushing a noblemen-led army. Another example is the Battle of Morgarten (http://en.wikipedia.org/wiki/Battle_of_Morgarten).
Concerning the original proposal, I agree it is overpowered. I think however that the "Modify Appearance" option, which does work along those lines (units hit harder than the scouts says) may be slightly underpowered for human troops.
They were led by nobles, if you bothered to actually read the article...
