I also think something should be changed about the bravery system. As it is, it just doesn't have much play-value.
Personally, I like dpelectrics suggestion best: beef up veterans' morale, but make the psi attacks of high-tier enemies more dangerous.
I think the medals are not only the easiest way to achieve that, but also the most consistent one, as they already reflect various aspects of battlefield experience.
(Be as it may, I already suspected the morale to be hard to increase - so it did the same as in X-Com: hire only soldiers with a starting morale >55, all other stats good to have but not as important.)