As far as history goes, we are not dealing with the huge armies of Napoleonic Europe, but colonial garrisons. Hence, massive armies are not demanded by the game’s setting.
Personally, I do consider WCIII to be an RTS (even if a slightly hybrid one) because of its adherence to RTS conventions, such as building buildings, gathering resources, training units, researching technologies, and commanding groups of units in battles. Interestingly, the game was originally meant to be even more RPGish; but in the end Blizzard returned to a more WCII like model.
I find no link between an RTS game’s quality or success and the number of units. WCIII is hugely successful with 90 pop slots, translating to armies of only about 30 units. AoK has a standard pop limit of 75; the 200 pop is an optional extra, and even so, still not great. AoM can allow up to 300, but in general, the armies are fairly small. METW has a pop limit of 16 per player per battle and RTW of 20 per player per battle. Of course, one unit has many men, but as far as control goes, you still only have 16 or 20 units.
Having multiple men per unit is an option, but not one I really like for the classic RTS mould. For one thing, I didn’t think the games that did it; RoN and BFME, were that great. For another, having 5 men pop out of buildings at once, especially in early games, might pose balance issues.
Huge population limits create various issues. There is, of course, the system resources thing. In addition, it can make control bewildering and difficult, with players spending all their time trying to keep track of their units. It could create cases where games become huge boomfests, each side trying to swamp the other with units and filling the map with houses in the process. In other words, the game is a single huge buildup. It could create cases where players administer the coupe de grace by creating 200 extra soldiers to flatten an enemy who has fallen behind. In AoM, GPs originally cost favour, but could be used unlimited times, but the idea was abandoned as a winning player would start smashing the enemy with Meteors or Tornados. I could see the same thing happening with huge pop games.
I’d like to see slightly more pop than in AoK, perhaps 500 slots max with military units taking up multiple slots, but no larger than that.