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Barbarossa. In july 41, a Pz Corps occupied Kirovograd in the Ukraine and was surrounded there. That was the farthest east any German unit got. In July 44 that Pz Kps is still there, surrounded by 6 level 5 Inf corps, and hammered, every turn, by 6 Air Armies. Every turn it resupplies itself and replaces all its losses. This is ridiculous. So if the Germans had taken Stalingrad, it wouldn't have mattered if they were surrounded or not. They would have still been there in 45.

I do believe that this was addressed in another thread and may have to do with the city providing too much supply...it is to be corrected in the upcoming patch...if I am mistaken then hopefully someone else will chime in and correct me...take care

It has been corrected in 1.20

In 1.20 sieges are corrected and system works very good, really. 

Like Severian mentioned, there's a generic siege feature in 1.20. If a city is surrounded by enemy a check is made, chance depends on odds, air superiority, city supply value and presence of generals on both sides. If the chech succeeds, besieged unit loses level, if at lev 1 - it is eliminated. With good odds and total air superiority the besieged city won't last long.

The other thing done to address this problem was change in the max replacement levels. It's now impossible to reinforce unit to full strength if it's cut off in a city. You'll be able to reinforce to 40-60% of max strength, depending on the city supply value, but you won't reinforce to 100% anymore (unless the city is a Main Supply source of course)