I prefer the idea of being allowed to retreat, though with the condition that you'd lose some strength on the retreat and that you might lose anyway. Also, hitting would force your unit to flee non-stop to the nearest province that you or an ally controls, and you have no ability to affect the retreating army until it reaches that nearest province's control point.
In the case of amphibious units or if you have only coastline available to retreat to (because you can't retreat to an enemy or neutral province), then you'd have to go back to the sea, and face all the vulnerabilities that that would entail.
Also, if you are surrounded on all sides, retreating to a neutral province might be a feasible option, with the caveat either that this triggers war with the neutral player, or maybe that you have a 50/50 chance that your army will defect to that neutral player (in which case you lose control of it, entirely).
Retreat is the only acceptable option. Having a visible resupply unit would just overly-complicate the battlefield, whereas a retreat option is highly realistic and would have penalties to prevent abuse of this feature.
