Definitely interesting. Making a mechanically complex game like this does come with a few worries though. The first one I want to bring up is balance, it'll be a bit of a challenge fine-tuning the numbers to make the game perfectly balanced. Last thing you want is for either of the factions to be overpowered. Unstable Equilibrium is also something you need to worry about.
Another problem you need to worry about is something that's part of the nature of forum games in general. Mechanics focused games don't usually last that long here. There are a few exceptions (mafia being one of them), but most of the time they fail. Sadly though, I'm not an expert so I don't know exactly why this happens. Maybe one of the more experienced GMs can add something?
The mechanics focus is probably what would keep it from happening, since I would very much like something similar to Vanigo's Empire Game script to keep track of everything, but I don't actually know how to code.
The Unstable Equilibrium, I'm less certain about either way. Part of my hope was that as one team got pushed back/closer to being defeated, they would cooperate more, while their opponents began to turn on each other. There's only one winner, really, after all. Of course, biggest problem I can see is that someone with more glory/better units than you can still ambush you to take even more. Which might mean that you take a hit to prestige if you have a unit with more upgrades/glory attack a friendly unit with fewer/less, and the unit itself might take some sort of morale damage (a decorated dwarven battalion will obey the order to kill their fellows, but they're not going to feel good about it, and a veteran goblin tribe will see it as beneath them; let someone else bully the runts. They have beards to collect.).
I also think that upgrades would get more expensive in terms of glory the more upgraded they are, or maybe new units earn more from winning a given encounter (recruits holding back a horde is more impressive than the King's Guard doing so, because it's less likely), though they're still more likely to fail in the first place. Routed units get restored automatically to some degree, destroyed units easy to replace (though with fresh meat, of course), doing poorly means the people come together to support you so you get more stuff? Another possibility is that Glory can only be used to do either upgrades or Prestige, but that seems more likely to make the problem worse.
Balance might be hard to get right, but I think if I did it I'd try to do a test-run or something for the first attempt to check on that.