This will be a long post, so I will appologise in advance.
To me, the issue of quality vs quantity has always revolved around two central problems - that units in the game are not directly representative of those from Tolkien's works, and that realistic armies consisting of large numbers of basic troops supported by a small number of elites will always be outperformed by more specialised troops.
Of course, these complaints are largely against my own aesthetic sensibilities. If you are prepared to take full advantage of all options GW have made available to your favourite race, then the game works out to be quite balanced. While we all often complain about stat creep (or at least I do), GW do it to correct balancing issues within the game, and introducing new units is perhaps an easier way to maintain the balance than constantly revising the existing troops... if you don't care about aesthetics.
The problem really comes into the game from the dramatic difference that 6D makes when compared to 5D for most armies. GW have clearly recognised this, as there are now many, many units with 4S available. Unfortunately, I feel this has shifted the game towards armies with absurdly high proportions of elite or specialised troops. This is a problem, as it means that if you are not careful, a battle can be won or lost through incorrect force selection.
Take for instance a Rohan army pitted against an Easterling one. If you decide to field that Rohan hero who allows you to upgrade your warriors strength to S4, you'll be ok... it should be a fair fight. If you don't choose to use that one specific (or perhaps Gandalf), then you're in for a very difficult fight. You will have no spears, so will need to defeat the enemy, spear supported line and wound on a 6. Cavalry may help, but the Easterlings can easily place up to 6 attacks against each of your horses. Easterling archers are also superior, so chances are, archery won't save you either.
God forbid Rohan should ever find themselves fighting elves.
Tolkien's vision
This is something which as come up from time to time on this site, and whafrog and others have gone to some effort to try and correct this.
At one stage, I even tried revising the rules to use a D12 system, in the hope that the larger possible outcomes from the dice would allow more differentiation between models, and allow myself to push the gap between the weak and strong. It wasn't long, however, before I realised that this would require considerable reworking of the combat rules, and a complete re-balancing of absolutely everything, so I quietly dropped the idea.
There is, however, a very simple solution to this problem: don't interpret the game literally.
If Tolkien were to have his way, every single elf would have 3 attacks, 3 wounds, and a bucket full of might. Clearly that would make elves very dull to play.
Rather than thinking of every elf model as representing an elf, think of 3 elves as representing a single elf. The elf's superior combat ability is thus reflected in his ability to hold off a hoarde of orcs in three seperate combats, shoot more frequently, etc.
In this way, you can be free to field a very "small" force of elves (represented by a larger number, of course) against much larger enemy forces, and still come off on top.
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