It appears that this is not a popular opinion on the Warlight forums, but I strongly agree with this:
Fizzer has, as everyone knows, made the game a game of strategy and skill, not a game of levels and experience. He wants the game to be as fair as possible, but people reject his dream by surrendering in these circumstances.
It is wrong, unfair and mean to surrender because you are losing.
In a 1v1 game, you can surrender because you believe you have no chance of winning: this is fine.
In a larger game, your actions affect everyone else and change the game for everyone. Surrendering changes the conditions of battle and tends to advantage some players over others. (I've won games simply because I knew certain players were likely to quit if I hit them hard, so I did so, with predictable results.)
Given that not everyone seems to feel the same way:
Perhaps we can use the "surrenders must be accepted" setting as a sort of "flag" for games which operate under this philosophy?
That seems plenty clear, and I don't particularly see the setting having any other purpose.