I do think its quite plausible for grenadiers of the 18-19th centuries having been used in early urban and siege warfare. Early hand grenades may have been primitive in their construction, but it's still a big boom in a closed space, not to mention the shrapnel flying around killing everything near it.
Or the attacker could just pound down at the ramparts/walls until they collapsed. The more modern forts such as the star forts designed by Vauban could stand quite decently against such artillery, but wooden fortifications and older design stone forts and castles were still put to good use around the world, and those could certainly be collapsed with concentrated solid shot barrages.
Early cannons for the most part used solid shot, or close range carcass shot, like a giant shotgun, where as howitzers and mortars had better trajectory for something like siege warfare, especially if you're the attacker, you could then just pound the enemy defenses over the ramparts with shrapnel ammunition before committing the infantry. For the defender, even simple cannons would be of great assistance in city settings, you could easily control an entire town square or an intersection with a few cannons and carcass shot. Also the defenders often used mines, basically gigantic bombs which they would ignite once substantial number of enemies had crossed into the kill zone.
But then again, such defensive forts were usually built away from major residential areas, in order to control the ground and I guess avoid collateral damage in a way.
Then if the forts were taken or armies defeated in the field, a treaty was usually signed ending the hostilities, and sparing e.g. the capital city from a bloody battle. At least in the 18th century, it was a widespread practice in European warfare to actually have your diplomats engaged in peace talks and diplomacy at the same time when swords are doing their work.
That might seem odd when you think about the total war that modern warfare really has become these days, a fight to the finish if possible towards an unconditional surrender, a ceasefire agreement, and then both forces stand down, while keeping readiness, and a final treaty is signed to end hostilities. However off the top of my head in the 100 days campaign of Napoleon the 7th Coalition really was determined to crush Napoleon once and for all, and not to negotiate with him at all.
If any civilians, peasants, craftsmen, guerrillas etc... were huddling inside a defended fort and the fort commander refused to surrender the fort (sometimes there were even conditions allowing the defending army retreat intact from the fort) to a besieging army, thereby forcing the attacker to commit his troops into a bloody attack, the defenders could expect scant mercy. This type of thing happened a few times in the Peninsular war I believe in the sieges near the Portuguese-Spanish border. It's a pretty ancient "rule" in warfare, hearkening back to to the Middle Ages.
Problems were often more profoundly logistical in the way that hand grenades weren't always available for siege warfare and such. They weren't exactly produced on mass, like they were in the industrial era by the time of the world wars, when the grenade truly became an integral part of an infantryman's arsenal. All weaponry was essentially hand manufactured until the end of the Napoleonic wars.
I guess the armies and generals of the time didn't really value the hand grenades all too highly, when you consider how powerful the artillery of the day really became when employed properly. It was in most cases more valuable to have working cannons supplied with shot and powder, than to have a supply of hand grenades.
