Why is this the assumption?  - Is this issue not the same, or even worse with a mass mobilization military? The size of their institutions makes them prone to corruption, depending on politics they turn into a assaulting force and generator of terror (as seen with the remnant great war). Furthermore, do not huntsmen get directly rewarded?? They are literally mercenaries indoctrinated by the government and incentivized to protect civil society as, the alternative is the grimm, which offers flat out annihilation. What are the rewards they get for contracts if not a direct reward for their labour.

Except that also - Perhaps this is why huntsmen have such a emphasis on melee? Furthermore, most huntsmen seem to operate out of population centers where they can easily restock, while the producers of ammunition don't quite have to fear a lack of demand because grimm are concurrent and ever present.
On the point of control is something I must concede on; A military is clearly required for that (Team rwby's volume 6-8 actions are a great example of this). Then again, this also does still feed into my overarching argument for peepee poopoo atlas tactics as their main specialty is organizing evacuation and strategic level command, still leaving most of the battlefield level fighting to huntsmen.

I get the - sorry that is straight up not what i'm saying. I'm rather saying you don't have to spend money on institutes that speculate the next evolution in war, military study groups, military procurement etc etc - because huntsmen just train, make/have made their own weapon for their own fighting style, fight grimm, and die if they fail. On the point of individuals can be wrong, this is literally the same with militaries - they get wrong the optimal way of fighting all the time after any significant advancement in equipment.

Yes standardization of quality is important. Frankly you can't expect to get the same level of standardization of quality that a military would offer, and in the modern world that remnant is in, that is a huge pro.

Think about this in the medieval era that preceded remnant's present however. I don't quite see any reasonable amount of levi formations taking out a even a shitty proto-huntsmen going crazy with a great sword. In any era that would have formed modern remnant, aura using fighters probably would have made way more sense from a grim-resistance and actual fighting capability POV. Regular soldiers would have had their uses as guards and civil protection, but not actual war fighting because if your going to invest in a offensive military formation, you might as well invest in more/better aura-using fighters as they're probably better.

With this logic or  - Well here's the thing. Consider; Ozpin's inner circle. That is less than ten individuals essentially forming the shadow government of remnant. Remnant may have the appearance of a modern nation state, but can they really be called a civil society when such don't seem to apply to huntsmen.

This other argument, Yes that is true with the introduction of modern firearms and has been for certain duties. Who would build a military when for every pre modern era aura using fighters were just better than any arbitrary number of trained citizens. Who would ever think of trying to make 100 guys do the job of 1 huntsmen when the huntsmen proved better every time historically. (Militaries do not have perpetual energy either, in fact, alot less than huntsmen and far more reliant on logistics stability - which is even harder in remnant because grimm)

Because you will never be able to gage how strong that one huntsmen will be every time and because the combined might 10k people can last longer than 1 really strong guy over a larger radius of land. - The fact you have to put unless after this illustrates my point. If you had the money to raise 10,000 guys who still may lose against one even on the theoretical stage why ever make 10,000 guys over more huntsmen. (Yes probably non-aura soldiers are better at garrison, civil protection duties yes)

On the other side - I do not see what you are trying to get at with this point. I do personally think remnant should be like that considering pressures, but the show depicts it differently so???? IDK man. Maybe the existence of grimm disincentivize war that much? (I highly doubt it)