Yes, that's right. The change in Dain's abilities took away both the defensive bonuses that you could get with Erebor to help troops survive, and the attack bonuses that really helped Iron Hills. I almost always used Dáin before the update, but now I don't use him that much, because more attack for my troops isn't going to mean they will not die, and Erebor troops die so fast without Dain supporting their defenses.
I like the three Dwarven Realms, but in this update I mostly use Ered Luin because of this. I can play Iron Hills as well as before (With more difficulties because of the change), but Erebor has been hindered a lot with the change.