Loghain is, first and foremost, a military man. His retreat from Ostagar was sound. The battle plan laid out, based on what information they did have, was sound enough though Cailan cocked it up thoroughly by wasting the archers and Mabari and charging out into the open and exposing his flanks -- which can lead to a double envelopment -- when Loghain simply told him to lure the Darkspawn to him. And the Darkspawn were charging at them just fine so there wasn't a need to meet them head on in the open field.
Also Bioware seems to not understand that a fortress is meant more for keeping your forces inside. Or how they royally cocked up Loghain's characterization at Ostagar.
Loghain also wanted the Circle to align with him so that he could use the Mages' power against the Darkspawn and, as would come with the Circle, the Lucrosians/Formari as a means to keep the war chest afloat.
He also wanted to enlist the aid of the Dwarven people who have the most experience fighting Darkspawn.
That is, in and of itself, the mark of a smart military man. He was not opposed to outside aid, as you find out the Free Marches sent some soldiers (though most nobility were jerks). He was simply opposed to Orlesian aid. And you can't blame him when the history of the Wardens is one of furthering Orlesian interests and Orlais has used the Blights as a smokescreen to "save" weakened nations and never leave until they're booted out.
He also keeps Howe on his side, despite his detest of the man, because Howe controls the greater part of the Coastlands. With this comes a great deal of military power that if antagonized could open up a third front but also allows him to transport needed supplies to his men.
We hear of how he easily crushes the Bannorn. We see him tell the Bannorn that they should unite under him immediately and replace the army lost at Ostagar so that they appear strong even though their king perished in battle without a named heir, as other people (namely Orlais) would take advantage of a nation that fell to petty internal politics. Unfortunately, it's his relentless drive to prevent this coupled with Teagan's altruistic but short-sighted comments that inflame the Bannorn and leads to the banns starting the civil war. Self-fulfilling prophecy and all that.
Where Loghain fails is that he's horrendous at politics. He's blunt and direct and a commoner to the core (noble in name, common in political mentality). He doesn't understand, or perhaps he doesn't want to understand, the intricacies of politics and so he tends to favor direct people. As a result this backfires, but that doesn't make him a poor military man. Only a poor politician.
Even so, the Circle not allying with him is also on Wynne's shoulders, as she couldn't even think of having the Circle align with the man who advocated that the nation fight against the darkspawn immediately. She, and indeed many people, would rather not see that Loghain is the far better option. When faced with an invasion, one must be unified to deal with it.
And yet many people, in-game and out, wish to claim the moral high ground. They can't. They're nowhere near it. Not even my beloved canon Warden Xanthos Aeducan, who led Wardens from every origin story against the Blight, feels he can claim it.
But he does use it to his advantage to advance his own interests.
EDIT: Beyond that, Loghain carries with him the morale bonus. Being the Hero of River Dane and being given another chance gives the army a needed boost in morale. Think about it, the general that crushed the Bannorn and Orlais with ease fighting on their side and helping the Grey Wardens? It's like it allows them to feel like there's a glimmer of hope, because he's a renowned tactician.
That DAO goes into Zerg Rush mode for the army is rather sad and I actually wish we could retake some ground from the Darkspawn in some major battles before going into the final battle, but whatever.
Loghain brings with him a morale bonus, something no knight can really give you. There's hope with the GW leading the front, but Loghain adds to it.
It's also clear from Loghain's character that he doesn't want power and he doesn't like it either. It's taxing and there's no chance of him going Dryden on Orlais. Plus, he wouldn't be able to do that anyway. He doesn't have the things that Sophia had in terms of political mentality.
He surrenders. Why would he betray you if he surrenders? He's already lost and there's nothing he can gain. He even says to Wynne as much.
And when he surrenders, he places himself under your command. The fight against him was for who would lead the armies assembled. You are the leader, he the subordinate. He knows of the chain of command. Why would he break it now when it doesn't serve any purpose?
The moral high-ground is one thing and that honestly varies from warden to warden. Arthunas Amell sure as hell couldn't claim that high ground, but Revan Cousland could. That aside, Loghain had his chance and blew it badly on a logical sense.
I won't fault him for Ostagar, that was a lost cause. He shares some of the blame for what happened, but not all of it. Retreating was the best thing that he could've done to save what was left of the army. It's what he does after Ostagar that messes everything up.
Instead of declaring himself regent and demanding the bannorn to join him, he should have called a Landsmeet and had this done the Ferelden way. Then he could persuade a majority to approve of him being regent of a lawfully elected Queen Anora. He should have known that this was the best way to do things, instead he tried to rush his own people and they reacted in a way that shouldn't have surprised Loghain.
If he'd handled the landsmeet better then his envoy would've had proper and less unclear clearance to enter Orzammar to enlist the aid of the dwarves. But considering what was happening at the time, anything that Loghain could've done would've been too little and too late for Ferelden. So attempting to negotiate with the dwarves is something of a moot point.
Like the Warden does, attempting to recruit the mages is a good call. Just not in the underhanded way that Loghain went about it. This was pretty much asking for dissent to occur in the Mage Tower and Loghain's chosen agent happened to be the ringleader of a secret blood mage party. In short, if Uldred's group had managed to kill the stationed templars (which they were well on their way to doing) and escape the tower, Loghain would also be partially responsible for a mass outbreak of abominations, blood mages and demons.
Not only is Howe guilty of high treason for murdering the Couslands, he is continually guilty of unlawful abduction, torture, murder, extortion and embezzling Ferelden's already strained finances. Loghain's very cooperation with this man and seeming condoning of his actions through promotions and collaboration are stains in themselves. If Howe's actions were brought to light, Howe would've likely eventually turned against Loghain in his mad ambition for power. The smart thing for Loghain to do would be to arrest Howe and have him executed when his usefulness was at an end. Instead, he know has a poisonous friend that's poisoning the very country that he's trying to save.
Lastly, what morale bonus could possibly be provided by a fallen hero? He poisoned Arl Eamon, sold Ferelden civilians into slavery to Tevinter, interfered with Chantry business and turned a devout templar over to the butcher of Denerem (Howe), and then there's his collaboration with said treasonous butcher. If I were a soldier told that I'm fighting under this guy's command or have to trust him to have my back in battle, I'd probably be discouraged rather than encouraged.
Perhaps Loghain would have enough honor not to backstab you and the game proves this. But we the player can't know this without meta-knowledge (essentially cheating) and we have no way of knowing if he's capable or trustworthy. At least to where he would be such a vital boon to the Grey Wardens that we throw Alistair to the wolves.





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