Brad,
I've been following your posts and beta journals with excitement for months now, and have greatly enjoyed seeing and participating in the beta process for this wonderful game. My group of friends and I actually came together playing Age of Wonders, its sequels, and eventually transfered over to Fall from Heaven and Fall Further. We live and breathe playing these games cooperatively, and have been incredibly excited for Elemental. TBS fantasy games with this amount of love and care in them don't come around every day.
Hopefully without being overly dramatic, this post was incredibly disappointing, for the news that it brought about the lack of tactical battles in multiplayer. Among my friends, we pretty much all agree that the reason that a multiplayer community endured for so long was, in part, due to the inclusion of tactical battles. While this may seem like a hefty claim, I can think of quite a few reasons why tactical battles are a critical element in the fantasy TBS multiplayer experience.
1. It invests players in each individual game. Without tactical battles, major game events sometimes go by without the other players noticing it. I can't state the number of times I've been in a Fall From Heaven game and my friend will be locked in a major battle without me noticing or paying attention. Most of the time, its just seeing the stacks of unit as they retreat from the battle. Additionally, as a non-participating player, you have no idea what actually happened in the battle, with no access to a log of events. On the other hand, in a game like Age of Wonders, every player knows about that heroic spearmen that held off three orc warlords, or the dragon that singlehandedly took on an entire garrison. Multiplayer feels like a story that everyone is participating in, rather than each player having their own simpler story in their own corner of the map. (as a side note, chat during tactical battles is very important
)
2. Tactical battles are a vital part of an empire builder/TBS game's depth. I imagine you already well know this, since you chose to design them into Elemental in the first place. Particularly now that you have special abilities, tactical battles are the game within a game that is a necessary component of mastering Elemental as a whole. Disabling them in multiplayer will turn multiplayer games into a different game, a game that's somehow less than the full Elemental experience. While I'm sure I will still play and enjoy cooperative multiplayer, without tactical battles the game will feel a little bit more shallow, with less mystery and complexity to master. It is my personal belief that depth is the key to making a game with great longevity. The more there is to study, there more there is to explore, discover, master, the longer people will play your game in order to master it, and the more they will fall in love as they realize the depth and complexity of the game mechanics.
3. Watching and participating in tactical battles creates community and strategy sharing among players in a game. One thing that is surprising about multiplayer empire builder/TBS games when you sit down and think about it is how little interaction between two teammates is actually required. In a game of Civilization (or Fall From Heaven) you can conceivably win the game without observing a single thing that your teammates might be doing elsewhere in the game world. Now, I cannot deny that some people found watching tactical battles as a non-participating player in Age of Wonders boring. I feel that for most who enjoy this genre of game, however, watching a tactical battle can be a compelling experience. It allows you to share strategies between players, both inadvertantly and by design. You physically see if that certain type of archer is effective in combat, or if he's just arrow fodder. You see how to position and move your cavalry so that they are most effective in tactical battles. This sort of strategy-share encourages a community to be created around a set of shared experiences - you can say to your friend as the battle is going on, "I don't think this archer type is working out." or "What do you think I should do with this footman?" This form of interaction is, I believe, at the very heart of any game that can truly be called "cooperative" and I believe it rightly belongs in the Elemental Multiplayer experience.
4. Battles are not truly "cooperative" without tactical battles. An oft-used cliche of teamwork is that a team is greater than the sum of its parts. However, when it comes to the combat side of the game, this cannot be true without tactical battles. While the auto-resolve AI has been great so far in my testing, it cannot truly simulate the tactics that two players who are working together could utilize in a multiplayer tactical battle. Again, special abilities are the key enabler here, Players may go down different research paths and have different units who then work together using their special stats and abilities to form a particularly powerful combination. Figuring out these combinations is a fun part of the player experience, and I believe should rightly be part of the Elemental multiplayer experience.
More points could be made here, and I'm sure the posters that follow could fill in here, but these were the primary ones I could think of.
For the above reasons I implore you to reactivate multiplayer tactical battles for the day 0 version. I don't mean to force this opinion on anyone, however. I believe the best solution is to leave them on by default, and have the tactical battle threshold slider be active in multiplayer for each individual player, or as a global variable set by the host. Just like single player, players will then be able to choose which battles are "important" and which can be left to the auto-resolve AI. While this opens up the potential for some griefing if one player refuses to increase their slider at the request of others, I find that in this sort of game griefing is really not a large issue. To play a game of Elemental even without tactical battles requires a considerable amount of time, and requires agreement among all involved. Irs easy to start a new game without an offending player, or just replace them with an AI (something I used to do in Age of Wonders on the rare occasions it happened).
To me and my group of friends, this is a critical issue. A game of Elemental with tactical battles is a different game than one without. While I'm positive that my friends and I will play and enjoy both(we all preordered a long while ago), the former in my opinion is a game with far more depth, story, and sense of community than the latter.
If you got to this point, thanks for reading my wall of text 
Naydien