Yes and no on the force size issue, I agree with you on the upper limit and the weather problems, but there is room for finesse. Like Orso pointed out, if you have troops in El Paso, and especially a wagon (I use the half-wagons in this theater) some supply will come in from the east along the stockade chain if you are consuming more than El Paso produces. Like you say, you definitely can't get carried away out there, but it depends on the force mixture too. If you are making a play for the FW then you most likely have all your Rangers out there, and they live off the land pretty well: I keep them hovering around, but not in, El Paso, lurking in friendly/targeting enemy stockades when they need supply, but ready to dash back to El Paso/Mesilla if they are needed. The mud/snow IS a big issue, but is usually manageable if you keep your force size reasonable. If I am serious about the FW I build regulars instead of militia (the mounted militia are good for stockade warfare though because of the mobility) since they use the same amount of supply per element for better combat effectiveness. The scripted forces are almost enough to hold El Paso indefinitely if you add in a couple of 12 lbers, which don't hit the supply too hard and make a big difference against all those militia. I sometimes use a depot card out there (since it doesn't make sense to waste a full wagon on that theater) and have used the stockade-card-trick to "rescue" troops stranded in the wilderness by mud/snow.
On offense, it is important to cut the connection between New Mexico and Colorado. If you do so the Union will not be able to relay supplies or artillery from Denver very well, making the task easier by limiting Union strength in the field. Burning the other stockades has a similar effect, and severely limits enemy mobility, supply and cover. Do these things and you will not need as big a force, making your own supply situation easier to manage. Getting rid of the stockade/depot that Canby starts locked in makes Union operations against El Paso almost untenable.
Ultimately, there is a limit on how many troops either side can field in the region though; go beyond this and you will be in trouble.
I do this too, it is the only place in the game where you can engage in a true scorched earth strategy. A fire break in the Trans-Pecos isolates the Far West pretty effectively (which is why I think incursions from the Gulf are more immediately threatening). The Union certainly CAN come in from the Far West eventually if they commit to it, but (as is always the question in the FW) is it worth it? Almost never IMO, although like I said, I often over-commit to the Far West just for kicks
If you want to mess around in the Far West, (keep those damn Yankees off the Sacred Soil!) command is also a problem. Rangers cost zero CPs, so are particularly useful in this region. There is a two element cav brigade that scripts into central Texas somewhere that also has zero CP cost; I often move them out to the FW or use them to take out the Kansas forts to prevent raiding along the Red River.
Did I mention that I LOVE the Far West? It is a total time and resource sink, but a really FUN one! (A good learning experience too: if you can overcome the supply and weather issues out there, the rest of the map will give you little trouble.)