Even with an axis vs. allies setup, no icons would actually be less realistic.
You have better depth perception and ability to discriminate objects at a distance in real life than on a computer screen.
Go down to your local airport, on a clear cool day you can usually tell whether it's a Cessna or a Mooney, color, etc, at 5000+ feet. In AH, planes are just dots at 3000 feet.
Now something we might consider is making the icon distance shorter, like 3K, in all arenas. I've also thought it might be an interesting idea to make the icon "blend" into the surrounding sky/earth/water except at short distances, say beyond 1.5-2K, instead of being bright red all the way. It would still be legible, but you would have to *look* to spot their plane. Don't know how hard this would be to engineer though.