Greetings.
Firstoff a clarification: a combat engine deals with probability to hit, reload mechanics or movement options. The issue you are talking about is what is usually referred to as "AI", even though in fact it is merely a glorified decision tree.
Apart from that ...
I understand your argumentation, and do think it has a lot of merit. I would like to point out a different aspect of your suggestion, though:
If you disable the option to save games during a mission, you also intrinsically constrain yourself to that all missions must be short enough to be finished in one session.
How long "one session" is, depends a lot on the player. For a pupil on holidays it may be fine to spend twelve hours of a day on a computer game, but as age progresses the time that can be spent on computer games usually decreases. Half way through an interesting session there might be some minor emergency because one of your kids caused some sort of havoc, which just takes precendence over finishing the level of the computer game you are playing.
I feel that is particularily of note for Xenonauts, because in my opinion it is targeted at older players. The big competetor is Firaxiscom [2], and when i talked with some friends about why I prefer Xenonauts over Firaxiscom 1, i managed to convey my feelings pretty well with that Firaxiscom is just so horribly neon, while Xenonauts is of a quite welcome sepia. I never finished Firaxiscom 1, because once i had flying soldiers with plasma snipers and soldiers that could stealth and the enemy just didn't have anything that could compare, the game became boring for me. Firaxiscom is to a large degree about the power fantasy of building this ultra-teched elite force of superhumans - genetically spliced or mechanically augmented, and preferrably also with psionic powers to boot. Xenonauts on the other hand is more about the gritty, somewhat desperate fight of "normal" men and women against an overwhelmingly powerful outer force - a fight that needs to be won through determination and smart application of tactics rather than just superiour hardware (this is one of the reasons why i personally hated the "we out-teched the aliens in a few months" rail weapons of Xenonauts 1 and am eyeing the currently suggested alenium supertechnology with a bit of apprehension). I do think it is natural that as age progresses preferences shift from extreme power fantasies towards more realistic darker stories.
As someone else mentioned (i think it was Conductiv) there is not much point in trying to outfiraxiscom Firaxiscom, especially if you are already operating with a smaller budget. Much smarter choice of action to focus on one's own strengths and a different playerbase than try and compete with a bigger company in areas where money determines the winner.
So under the assumption that Xenonauts is generally more targeted towards a slightly older audience, you'd have to limit your missions so that 90% of them can with certainty expected be finished in an hour or less, even by somewhat inexperienced players (you might have a few gamechanging missions like the last one that will take two hours). Would you personally state that this trade off for a probably better AI is worth it?
Regards
Drakon