Well, that happens because you only have 1 upgrade spell: the model changes from peasant to bandit. Copy that spell (upgrade) and make the next one change the model from bandit to militia, and then the one after that from militia to Footman and so on.. thus you will copy and change the spell 4 times.
All you have to do is make a trigger that unlearns the upgrade (upon event - purchases upgrade) and then learn the new spell in it's place. If you don't understand, I will try it for you and post the map here?