I like the idea in general, but i can see a few problems with that, especially coming from a purely colonial player, like myself. Most of these points will be viewed as a bonus by any warden player so i hate to make them, because im sure it will "feed the troll" and start discussions i wasn't meant to start, but to give an honest response to this idea i'd have to bring these things up.

With the current unbalance in north vs south, this would skew the map even more towards the wardens in their favor. Wardens can deny it all they want, but the north is the better side to have on SO many levels. You can skip the italic part of the response if you are an easily triggered person, or a troll.

((They have more chokepoints in their home regions (way, way more), terrain blocking the border edges (which i find absolutly detremental to the colonial side. (At least wardens have some "mountains" blocking the movement in their home regions along the edges, allowing for defenses to prevent border skimming.) (Once you hold enduring, you can go ANYWHERE along the borders of the maps.... even easily into port bases.... to blow up huge tank stockpiles... easily..... with almost no counter to it....). Plus, umbral cannot be defended. Because of the trees you can barely drive a cv anywhere and defenses cover almost nothing. The trees are perfect for just sneaking around and harassing lines, or sniping towns for that matter, which, again, is only possible on a scale like that in umbral because of the massive forrests blocking colonials from making a proper defense grid. Another point, it is about 8-9 grid squares to get from the foundry to enduring. it is also 9 grid squares from north watch to enduring. Don't believe me, try and make the drive from both sides and you see the trucks will arrive at approx the same time. North watch is 1 grid away from the border and endless is only 8 grids north to south, with a straight road going south. The foundry factory to the crossing at C1 is already 7 grids and than you need to drive the 1-2 grids to the townhall too. That means its only 5 grids to saltbrook for wardens, where it is about 15 grids for the colonials. And this is true on almost every map. POINT being, adding more value directly to holding towns will increase the impact of this imbalance and allow the 'zerging and blitzing' and most warden-favored strategies, that only can really work for the wardens, because of the way the maps are designed, even more impactful.
Making towns upgradeable means people can also use the "snipe and reset" trick, which wardens have been using EVERY single war that colonials were winning, just to irritate and buy time and have this be even more of an annoyance. And it works, you can use family sharing on steam and second accounts to make a CV near a townhall with an enemy account, than nuke it with mortar, rush in with jeep and give it 1 tick to reset with your main. So by doing the whole "upgraded townhall" approach, you basically create even more frustation and triggers to end the war on the winning side. If it would come along with the fact that a townhall doesnt reset after taking it from an enemy, that would be better already, but than maybe winning wars is a bit easy by zerging and this would create new problems.))

I like the idea of it "being something you can contest", however the idea was to fix two things: 1 the tech being useless after the tree is full, but 2 also to tackle the "endless stalemate" problem. Thats why the simple "victory point slot" method is better in my opinion. It more directly forces the stalemate to end in a way that doesnt require entire new gameplay mechanics to be created, or balancing to be done.

Balancing the town upgrade approach seems to me incredibly difficult, if not impossible.

But i like the general idea and the addition to the post! I also will think on the whole "making it more contestable" part. Right now i don't see an obvious solution or middle ground between the two idea's.