That's kinds what I just said...
So, what do you suggest?
Well, I think it would be interesting to tie it into estates a bit personally, but since the new changes haven't been released all I can say is that being at war should lessen any negatives a region experiences - maybe even provide improvements such as reduced production loss, region loyalty loss, morale loss etc. Each battle should improve stats (or lessen the effects that push stats downwards) - war makes the people more loyal, they are afraid of the "other" and are more willing to suffer high taxes, work harder, and have fewer freedoms if it protects them from the scary other.
Having war bolster regions would help reduce the need to look after regions while fighting wars - we had that problem in Zonasa in the last war, where regions were becoming unmanageable because our nobles were off fighting, never mind the enemy never set foot in our realm.
These effects should be tied to battles - the more battles you fight, the stronger and longer lasting the effect. Even if it's just rogues you should get some of these effects as the people "know" the army is out there fighting something that's going to hurt them if they aren't careful.
I'd like to see more "gain" for players from war, maybe higher honour and prestige gains from fighting PC armies when compared to NPC armies. I'd love to see something like "loot" being distributed to an army (or army chest) or nobles when a region is successfully TO'd, but I would worry about game balance - though gold being put into an army chest may not be so unbalancing. Even from fighting battles - gold looted from enemy corpses, from the armour / weapons of the fallen, from the peasantry - what have you - that gold gets put into the army chest for repairs/training later on.
I mean, it's awesome to get lots of honour and prestige - but rarely can anyone use it. I can field a 210 man unit. . . but i'd never get that much money on my own to get that many men, much less pay them on a weekly basis unless I was a Duke.
Maybe unique paraphenalia can be acquired via fighting a war (or against PC armies) or with higher levels of honour/prestige - trophy banners, Realm Standards, Priests of your Faith (or banners of your faith), etc. Things that could show up in battle or give your unit a more unique flavour. Rewards for fighting in battles against PC enemies - even battle honours for Armies, something that makes the players want to fight each other for the rewards. Maybe a certain number of PC vs PC army battles grants an army lower training costs or improved training due to the veteran survivors passing on their knowledge. Maybe an army that scavenges a lot can have not only their own equip dmg reduced, but places some extra "weapon/armour" (metal) in the army chest, reducing the repair costs for members in that army (simulated by your unit scavanges the battle field . . . . in addition 5 gp worth of metal is sent to the army supplies - which grants 5gp to the war chest).
I almost want to see in a battle report "Unit X has captured a battle standard of Saguist Astroism in battle!" Gold reward? Maybe, bonus to morale? Probably. Put a giant nasty target on the characters head because they now have the honoured standard of someone else? Oh, definately
Battles could even lower the cost of the "pay your men" option - looting was very common in those days, whose to say your men didn't stuff their purses with the gold from the dead (or loot some people on their way back to camp?).