Stacks of doom represent the strategic reality that concentration of force is a good idea. However, you can concentrate force without concentrating yourself as a target. Disperse your guns and all shoot at the same thing from different places. Concentration and dispersion are in tension, increasing the value of mobility to concentrate and disperse where desired.
Enough theory. Current collateral damage encourages spreading stacks over several tiles, as long as they can all attack a target together. The main reason (other than that simply taking the shortest distance between two points puts all units at the same place) not to is so you can stack defensive units on top of other units to protect them. If you have one maceman on top of each catapult on separate hills you are more likely to lose catapults than if you have three macemen on top of three catapults. You may lose all your Macemen, but the catapults will survive. Sequential combat makes stacks a good idea. The problem with the SOD is the sequential nature of combat. One unit after another fight a duel until one is dead. There are several possible ways to solve this:
1. Allow players to select which unit to take one "shot," ie take a chance to do some damage to the other side while be exposed to a chance of being damaged. But after each shot allow players to switch units out, rather than having to wait until somebody is dead and the other wounded. This would be tedious and hard to teach the AI
2. Battle maps. When one stack attacks another, both are placed on a new sceen like a city screen that allows the units to maneuvar and fight out the battle on a grid of subtiles of the individual tile where the battle takes place. This does the same thing as above but in a more interesting manner. I suggest 7 by 7 since it has an almost equal number of interior and perimeter squares (perimeter squares could represent adjacent tiles). Battles would last maybe 7 turns, long enough for even the slowest attackers to have a chance of attacking any defending unit unless blocked, or for even the slowest defenders to flee. In battle, each hit point of a strategic unit would be represented by a single battle unit. Thus hit points and combat strength would have to be separated. If the seven turns were used up and one side had not cleared the field of the other, the tile would have a battle icon placed on it rather than the graphics for the units present there, and the battle would resume the next turn.
3. Synergy groupings. There could be some kind of formula to allow combinations of units to be grouped together as a single unit, something like unloadable civ3 armies to produce a unit with totally new characteristics. This would reduce the number of single units to be fighting duels.
4. Logistics. In fact concentrating units together makes logistics easier, unless you are living off the land.