I don't think you are calculating defense accurately.
No... going by the simplified formula in the translated manual (which, according to the manual, is a little off but generally sufficiently accurate), a base 20 attack critter has a damage range of 16-24, the exact number chosen at random and then the attacked creature's defense just flat subtracted. Given a +defense of 5 (three from the commander's skill at max, two from kit), at 16, it'd be 16-5, or 11 as a result, a reduction of a lil'less than a third. With 24, it'd be 19, a damage reduction of around a bit more than a fifth, and that's
just the commander's bonus, versus the highest attack third rank creature in the game. Like I said, I would count a reduction ranging from about a third to about a fifth as pretty substantial, m'self. And that's only versus the absolute highest damage 3rd rank in the game and using a defense 0 unit as the attacked -- against everything else, using any other base, the damage reduction should be even more notable. Morale or various abilities can throw things out of line a fair bit, but just by the raw numbers, I like what I'm seeing.
Now, mind you, that doesn't necessarily mean that warriors or wizards don't outmatch a commander -- I'm just noting that the bonus from a (mid to early teens, probably) commander with fairly moderate equipment is pretty darn notable. Commanders are almost certainly
cheaper, though, between the lowered troop upkeep and neither doing direct fighting (top line equipment gets massively expensive to repair, from what I've seen so far.) nor spell slinging constantly, the commander doesn't seem to have quite the same level of resource cost to it, either.
And looking at it, morale's actually a damage
multiplier if it gets high enough. There might be an argument for commander led third/fourth rank critters doing some really devastating stuff... the higher the critter's damage, the bigger the benefit from high morale, and there's not much quite as good as commanders (maybe a commander -> wizard for some morale boosting buffs, I'unno.) for getting that morale up there.
