ORIGINAL: Schmart
Unfourtunately, WitE is NOT a simulation. Simulation implies using data that is as accurate as possible. Considering that the Russian OOB and force structure is widely customizable by the human player, I'd suggest the term 'simulation' be used sparingly. It's a game based on history, but not a simulation.
No, it ain't. It is a compromise, a game with a simulation touch. Which is fine, though some of us, perhaps all too likely also those who endulge in endless hours of micromanagement in WitP, would probably prefer more simulation than game.
The definition of simulation doesn't mean squeezing in a tight corset as you imply. In fact, the most powerful simulation of that kind would set you up at that exact moment in time, with all the previous courses, data, resources etc. exactly historical, or in some way reasonably changed within the (parameter) space of possibilities. Then, from there on, everything would only be limited by "true" mechanics, which would for example be basic physical laws etc. Or the "true" impact of things on the morale of the population, which in turn would influence a myriad of other factors, from desertions of the boys at the front to the production efficiency or will to endure nightly bombings at home. However, this for example is very hard to assess in a quantitative fashion, and to then implement in a mathematical framework that would represent the exact same thing in a tractable, flexible way in a simulation. Since you can't do that, you will have to make some approximations and reduce stuff.
Things like organizing forces surely are within what people could easily have done at that time. Yet they could have build a star destroyer, beamed supply, or developed a 1980 tank in no time -- unless given the time and fulfilling side conditions -- kind of a "civilization simulation".
If you cut things like OoB organization, you would rather call that a simulation with limitations, or constraints. That would be a method to elucidate the impact of each parameter systematically and decoupled on certain aspects of the outcome.
That, however, doesn't mean I agree with the fact that one side has the flexibility, and the other not. In fact, if the underdog had this added benefit, like IJN in WiTP has benefits the superior side doesn't get, I would understand this design decision. On the other hand, Axis doesn't really have the resources to do much even if it could create larger formations. I am rather pleased that the Soviets rebuild a myriad of divisions (for free), since the more one creates, the weaker each one will be and the longer each one acts as a replacement sink... If you would force them to select which ones to rebuild, they might be going to less but stronger OoBs?
Much more impact for the German side than the ability to create units would have an option that would allow adjusting ToE slots, i.e. which tanks go to which units first...