As other people have mentioned, combat in Civ V is heavily, heaviliy abstracted, even more so than a lot of people are giving it credit for. Look at how long a "turn" is; tank vs. spearman isn't a few tanks charging a line of ten guys with spears one time. It's a tank division attempting operations against a group of trained individuals generally armed with bronze-age weaponry over the course of months or more. (Granted, the "look at how long a turn is" argument breaks down rapidly all over the place, since it doesn't, for example, take a modern fleet many years to sail around the world no matter how you're abstracting things.)
Let's ignore that for now. Either way, it's primarily a gameplay concern. I'm utterly baffled by the claims that this is an undue tax on being technologically advanced; in Civ V, advanced armies pulverize dramatically larger but more primitive armies, minimum-damage rule or no. The notion that it "invalidates" that sort of style of play is beyond ludicrous to anyone who's been in a situation like that. Sure, a single infantry will eventually get worn down, but I don't think anyone should hold an expectation that they should be able to be successful in combat when they've only built one unit, purely from a gameplay perspective. If anything, the rubber-banding isn't strong enough - it's very difficult for a civilization lagging in tech by a few eras to ever catch up; to argue that focusing on teching up - the cornerstone of basically every dominant strategy on every difficulty level - is invalidated because of the minimum-damage rule requires living in some kind of crazyland; it's just so blatantly untrue. Yes, you can't take over the world with a single infantry or something, but does anyone think that that would be good for the game? A very small modern force will steamroll a much larger force from several eras back. This is a Civilization V game fact.
A more advanced force will win against a more primitive force. The question is, from a gameplay perspective, how much of a speedbump should a more primitive force be? That is, what should the cost (primarily in unit-turns, since modern forces lose relatively few units - zero, outside of extreme circumstances - against armies that would be doing zero damage to them without the min-damage rule) be? That's not a question with one right answer, and the answer fits into a complex system, since the rewards (puppet cities, loot, etc.) and the other costs (diplo hits, etc) form such a complex system together. Maybe someone can confidently say "the game is better because it takes a civilization with an army of size X and composition Y 20 turns to wipe out a civilization of size A with an army of size B of composition C instead of the 17 turns it would have taken if they didn't have to rest their units because of the min-damage rule". Maybe someone can confidently say that that makes the game worse. It certainly makes combat somewhat more interesting (an improvement over "not remotely interesting at all") in cases where one army really is large but so inferior technologically that they'd do zero damage most of the time.