Is it true that when the Kaldorei were folded into the Alliance for game structure reasons, they lost most of what we’d call their heavy units from WC3? Yes. Though with the Horde having what it has now, it probably wouldn’t cause any real narrative issues if they got the stone giants and chimera back.
That said, to confine it to a lore discussion (and spitball/observe), the Night Elves never had an army of conquest. Look at them- they arose from an internal revolution, and (with the notable exception of the costly war of the sands) didn’t set out to build (or re-build) an empire.
Their military was (and arguably is) almost a warrior cult. They’ve never invested much in infrastructure or production capacity (never needed or wanted to!)
They are fast, mobile, and highly skilled. This, at least, was somewhat well portrayed in the War of Thorns, with the mobile druid group sowing absolute havoc against a force many times their size. They are masters of ambush and movement- not of taking or holding ground. They are right to retreat through Ashenvale, because that creates opportunities for them to fight in the way they are advantaged.
That is, when they are written right (which, again, the material around Sylvanas’s offensive, they largely were- they were just disgustingly outnumbered.) When they are written poorly, it tends to be a disaster of them failing, screaming for help, and being torn apart so that either the Horde can look good, or the Alliance cavalry has something to save. But I digress, badly.
I suppose my point is, when speaking on what the Night Elves should have, or can, do, or how powerful they may or may not be, keep in mind what they are. They don’t have shield walls, bunkers, and rifle lines when written well. They don’t have the deep, consuming military industry that cranks out steam tanks, rifles, and pressed-into-service footmen.
They do have very skilled and versatile warriors who have a powerful martial tradition, backed up by very complimentary druidic forces that work as an amazing auxiliary. So yes, they are powerful, they should be written as powerful…
…but they shouldn’t be written as being able to stand up effectively against the grinding, heavy, supported slog of a Horde army katamari either. At least not in a straight fight.
(All that said, I’d love to have even a short story of the night elves playing the part of the Parthians against Crassus- but Blizz tends not to over think tactics.)