The way I see it, an army is good for controling ground and civilian populations. A single 10th level group won't be able to hold an entire battle front. However, if something attacks at a point along the front, they can quickly deploy to counter attack, or on the offensive, they can probably blow past a defensive line. But they still need guys in place to watch the line, and possibly hold against a dispersed raiding force. So armies will be necessary, but they probably won't be involved in the heaviest fighting.
Also, 10th level characters have the resources and mobility to avoid fighting the army head on. Try marching an army someplace when attackers can pop out of nowhere at any time, attack a section of the army as a camps or marches, and then disappear before you can bring your numbers to bear. A 10th level rogue could stroll right through a picket line, waste sleeping people - preferably commanders, champions, and spellcasters and then escape. Or he could sabotage or poison supplies, etc.
Now consider the 10th level characters on the other side doing the same thing. Fielding an effective army becomes very expensive in both money and lives very fast. While it costs a lot to hire elite adventurers or mercenaries, employing fewer but high level troops has a number of economic advantages. First of all, high level guys are already trained and equiped. Even if the common troops are poorly equiped, the costs add up in large numbers. Also, the supply situation favors elite armies. Since there would be far fewer soldiers, less supplies will be needed. Magical mobility cuts down on travel time, further reducing supply costs. Also, expensive and vulnerable supply trains become unnecessary, which also reduces manpower for further savings. Finally, you can avoid large scale conscription so the economy isn't disrupted.
Finally, Mass spells are only effective on the small unit scale. They are limited in the number of targets by caster level. It's not like Mass Haste would affect a whole battalion.
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