If I understand correctly, what you're talking about is driving the metal wire into the balsa directly, kind of like a wedge. That is precisely what you don't want to do, as that will weaken the wood. The idea of drilling a hole is so that you can slide the piece in without wedging the fibers of the wood apart, which could cause it to split over time. When I drilled the hole, I drilled the smallest hole possible that would allow the wire to fit snugly.

I have a negligible amount of experience with balsa and airplanes, but this principle applies a great deal to dentistry. Sometimes, when we don't bond large fillings to teeth, we have to use pins to hold the filling in. One of the major risks of placing pins (which are less than a millimeter in diameter) is splitting of the tooth! Balsa has more give that dentin, but the physics are the same.