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I love the idea of an army of small squads of IG ( or whatever it is called now)... Is there any way to run this competitively? I'd be open to any ideas.

I run my teams in valkaries, and drop them down on objectives. Cities of death I make them run into ruins as soon as possible. Footslogging is the worst tactic for single guard units.

It can be done with blobs, but not really with small squads. The large blobs can take a beating and are still cheapish. And they don't run because of commissar/priest. Small units are prone to morale and don't really kill much.