This was done as a mod for Operation Flashpoint called "capture the island". The gameplay is much like the idea you describe, but the commander is a soldier on the ground too, not some ghost up in the sky. Each side has eleven player slots (one of which is that side's commander, the rest are squad leaders), and the commander has a special vehicle called the mobile HQ from which he can build facilities to produce men, weapons and vehicles.
It can be played with any mixture of human and AI players. It was quite a success as it quickly became the most popular game mode.