I think having two sides instead of three would be detrimental to the game. If any of you guys have played any of the 'modern' FPS games like call of duty, then you know what I'm talking about. Players would switch sides, so a normal 10 v 10 would be a lopsided 15 v 5 or worse. Having the third side there is the 'imperfect equalizer'. I think my old idea of limiting the bases you can take off from at later hours would potentially be easier than changing the sides from three to two at later hours.
Had to so some searching but here is the link.
http://bbs.hitechcreations.com/smf/index.php/topic,354404.0.html
I think your idea chilli was a good one too.

•Choose an off peak time (one that would take up only a very few hours during the worst of the low #s time period).
•Shut down Late War arena and save current war status (mid war and early war not affected).
•Run a newly designed Axis and Allies arena (two sided but totally MA style minus the ability to fly "any" ride).
•Initiate one of a number of current "special arena maps" that have never seen in the MA.
•<<<Suspend all side changing rules >>>
•<<<
Added Fixed>>> Break the Perk system, either no perks awarded for lopsided advantage or none at all (as well as toss ENY).