Small stacks mean the same problems of carpets of doom without any of the tactical strategies. There's no attempts to flank to take out ranged units or anything like that because the ranged units are protected by defending units.
Small stacks is the worst of both worlds, not the best.
Oh, come on.
I know this statement, it was argued to pieces before release of civ. In fact I was one of supporters of this statement. But open your mind for a moment. There's combinations that would be more effective than others in certain situations. It would be primarily used to get rid of logistics nightmare. Also ranged damage spreads in a stack, ranged units could be at all times protected, but still in danger (alternatively ranged bonus/penalty could be 5-10% per unit in the stack, up to 20%-25% when full 5 units, meaning ranged units would get 20% more damage output against a stack). There are still such things as flanking bonus. If my stack of 5 (2 archers, 2 spears, 1 warrior) gets ambushed by similar stack and they would just face off, the outcome would be an expected one; fast carnage until one side remains. But if they were to ambush the stack with semi circling with 2 spears and 1 warrior with 2 lone archers behind, the outcome would be different. As ranged units can't kill off one unit at a time be "precision firing", concentrating on one unit at a time would be ineffective. While their archers get to attack whole stack at once, spreading the damage to all, my ranged including hence dumping their attacks, and melee receiving flanking bonuses. Depending on circumstances this ambush could be fatal. Also horse units could be receiving better flanking bonuses and as they move after attack...
There could be situations where being in a stack is more beneficial and there could be situations where spreading out would be more effective or even necessary. Primarily it would be addressing logistic issue. And no carpets of doom. I can't imagine having so many units in order to form carpet of doom of mini stacks. If there can be, then unit output should be limited more, tied to population and so on. So that one rarely could amass more than 10 or so units. Navy separately. Would make wars more pleasant methinks.
It's not the best of two worlds, not even close. It's a compromise.
More alternatives:
Units in a stack work like fighters do (they are stacked and can each intercept only ONCE until given promotion of additional interception per turn). So they could defend ONCE. So that you wouldn't attack that one sword in the stack over and over again until he's dead, before you attack archers or others, but rather best unit is used for defense, but when he defended once next best is defending, even if the first is still best.