Actually, I had another thought:
Militia is so prevalent because it's an easy solution. You don't have to worry about them not following orders because they're not human controlled. They'll always be right where you told them to be. If we can force players to take a more active role in their defense, we might see more opportunities for strategy to pay off and region turnover.
Is there a way we can set a hard limit on the amount of gold spendable on militia (at the realm, duchy, or region level)?
This would obviously limit the amount of militia you can put into any given region, potentially making where you place them a much more meaningful decision while also limiting their maximum strength. Consequently, this would also encourage better gold distribution because what was being spent on militia can now go to players instead, increasing mobile strength which promotes active campaigns.
I feel like I haven't quite adequately expressed what I'm thinking here, but hopefully you get the gist. The primary point is that militia is abused because it's such a reliable option - push the power back to inherently unreliable players and place a higher emphasis on their involvement.
I know for a fact that most characters (unless they're very new) don't hit their recruitment caps on a regular basis and often don't get enough gold despite the claims of too much gold in BM (and are probably bewildered by such claims). This solution might address all those concerns simultaneously.