OK, I've been looking at the results you've got, and thinking about how to make this better.
I don't see anyone getting a lot more than their allotted troops in the two battles that were started last night. However, there is a rounding error of one regiment often, which is why Matt has two regiments instead of exactly 500 men -- the first regiment it gave him was not quite 500, so it added another. There are ways to give people the number allotted to them, for instance give everyone a possibly tiny regiment, which I don't think anyone wants. Another way would be to give regiments til the limit is reached, then shrink all the regiments until the total men equals the limit. For example, if you were allotted 500 men, it might give you a 450 man regiment, then another 450, and the shrinker would bring both regiments down to 250. I don't like this solution but it is possible.
One thing that happens is that half of a player's infantry and artillery is reserve, and reserve units are always removed from the side with more men first -- so if two players on the same side have limits set of 2000 and 4000 respectively, and combined the balancer needs to bring them down to 4000 men, it will bring the second player's strength down to 2000 first.
This is why in those scenarios last night the reb players all had about the same amount of infantry, because there was too much on the reb side when it set them to their limits, so it removed all the reserves leaving everyone with their main 5 regiments. I can easily turn this off for the Missouri campaign. If I remove this part, the results will on average over many battles correspond to the limits set by the commander, but each battle there would be some players who are unlucky and have lots of regiments removed from them, while others still have near their limit.
Now, this isn't a problem if the total limits on each side are equal for a battle -- so if their wasn't such a big difference in players at the battle it would generally give everyone what they are allotted, but still with the rounding error.
Another way to approach it, is I could have the hosting page tell the host which side has a higher overall limit, and how much higher it is. Then that side's commander could edit his side's limits temporarily, for that one battle, so when the scenario is created the limits could be the same. He would then get to decide which players lose troops to make up the difference. There will still be rounding error of course, and the numbers are never exact anyway because the balancer also takes all of the units' stats into account. I feel this solution would be the best and simplest, but what do you all think?
Now for the other idea of giving both sides a single army and having the commander break it up among the players. I've been thinking about how to do it and just can't come up with a good solution. Any way I approach it, it's going to involve a lot more work on the part of the commanders before each battle, meaning it will take longer for battles to start, particularly since players come and go while its being set up, this is why the automated system has worked so well for getting our pick-up games started really quickly. Also the players wouldn't have "their own" troops anymore, unless I made it possible for the commanders to choose exactly what troops go to who each time, which would be a lot of work both for them, and require me to write an entirely new system.
If this was what everyone wanted, the easiest way would be to just use the random OOB generator and let the commanders edit their sides in the OOB editor before a battle, and keep score manually.