I'm playing through Just Cause 2 in Story mode (unsure of difficulty, likely "Normal"), I've killed over 30 military leaders, destroyed at least 15 fuel pipelines, I have a good chunk of destroyed wind turbines, cranes, satellite dishes, lots of Fuel Depots and Gas Storage pipes, plenty of Generators, Broadcast Towers, and Propaganda Trailers, and about half of all Radio Masts.
I have done less than 5 gang missions for each given gang, and have less than 10 sites 100% completed.
Despite the destruction text talking about a negative impact to the Panau Military, it doesn't seem like any aspect of the game is easier, in fact, it seems quite the opposite. Military responses send multiple Helicopters as opposed to only one even at Heat Level 2, and they arrive quicker, the accuracy of the shots taken by military infantry seems to be better even in civilian establishments, as I'm regularly running away and edging death heavily.
Is this expected? I expected to see less military infantry in military sites within a certain range of significantly (or completely) destroyed bases, but instead it seems to be overrun with Elites more so than common infantry men. What's the deal?