Stop letting them get in 6 inch range? Supression and reactions are the key to this game. Axis can supress and outrange a good deal of units pretty easily.

They're an annoyance, not a major force. You know, flankers and scouts? Point-filler. And that extra 4 dice can be useful; they can pin a much larger and more dangerous unit, while taking little but suppression in response.

I have to agree that the observers serve little purpose.  The only effective use I've found for any of the observer teams is joining a Soldeir 2 command section hero to them to give the hero Team and a pair of radios.  Beyond that, they are not of much use and the points are often spent better elsewhere.  I think the main reason for their lack of purpose is that any Artillery weapon can direct fire with a range of 36" and make a Sustained attack.  It isn't that hard to get LOS to your target which is all the observer team provides.

I feel your pain Warboss - I too play in a campaign against the SSU.  My opponent however likes to field Winter Child - so any of my S2 units take a beating.  He just finally figured out how to make him deadly effective - he's like a flying harasser.  At first I threw a ton of energy into attempting to take down the SSU force - but now I have to simply rely on an overall strategy of beating him via the misison parameters.  I still have to apply some tactical shifts to my plans - meaning I cannot afford to lose too many units - but sometimes a group of zombies makes for an oustanding piece of bait.  As an axis player I have learned NOT to sit idley by.  I'm not even sure how to play the axis as a defense team - save for adding dig in.  Angela is your friend - so are your snipers.  Blutzkrieg will get you as close as you need to be to soften him up.  I have used Hans in the past - but I'm trying out some new options.  One option I did a while back was take Manfred as CO + a beobachter - thus two radio commands + weiber serum (you MUST make yourself remember to use it).  Heavy Flak Grenadiers - are amazing.  You only have to use the burst feature IF they are in cover - if not - light him up.  It's 9 dice - all you are looking for is suppression - not a table wipe.  Also - if your opponent isn't too "cheeky", meaning he's stacked his campaign with heavy armor or WC, use Heinrich against his guys.  That's another 30" range vehicle.  Again - he can help keep the suppression on.

Here's a couple of the campaign playtest armies I used - I have included the outcomes best of memory.

Key Positions - Snow - 

Dust Warfare - Force Builder
Faction: Axis ( 150 / 150 )

---  Sturmgrenadiere Platoon (150)
Upgrade: Extra Panzer Support (10)
Command Section: Manfred (15, Hero) - Survived
1st Section: Heavy Flak Grenadiers (26) - Survived
2nd Section: Axis Gorillas (24) - Dead
3rd Section: Battle Grenadiers (17) - Dead
Support: Beobachter Team (8) - Dead
Support: MPW III-A "Wotan" (50) - Survived