I knew I forgot something :-).
When the simulation is run with the "no break" rule in effect, the
addition of a peasant always helps the stack, even in the extreme "20
nazgul stack" case -- for both the current simulator and one with the
4:1 ratio rule.
Therefore I conclude that the fears that there exists a counterintuitive
situation where adding units to a stack makes it weaker is groundless.
However, I'm still interested if anyone can poke holes in my earlier
reasoning and come up with a likely case where this is true (which we
can then test with the simulator).
-- Scott T.