The simplest method of "fixing" militia that I can think of is making them count toward population when calculating how much food is consumed in the region per turn (with the possibility of going over the regions max pop.). Then it becomes a matter of balance, as even a region that normally produces a surplus will eventually run into a deficit if enough militia is piled in.
Personally, I never saw a problem with militia. Skilled infiltrator attacks, starvation tactics, and simple smashing with mobile troops make them more a speed bump than a threat.