Unless I missed something, efficiency rating is driven by the absolute value of damage done. Consistently killing and forcing infantry to retreat can be more valuable than wiping out the squad if the net cost of consistently reinforcing them without producing results becomes greater than the actual value of the squad.
Unless I'm dealing with a campy motherfucker I don't really think about building the 120mm howitzers.
you aren't considering the time it takes to rebuild the squad that gets wiped as well as the extra cost (IE: if 4 men get wiped in a gren squad, wiping the squad, the efficiency rating you refer to will only be 25% more, it will not reflect the fact that rebuilding that squad will cost more than reinforcing 4 men on 2 separate occasions.)