For example, in the German invasion of Russia during WW2, why didn't the invading German army conscript from local Russian civilians they conquered? I think the Mongols used this strategy. Why hasnt this strategy been implemented more?
It is implemented all the time. The nazis absolutely did this; there were SS units that were international in character. There were proxy armies of Ukrainians and Hungarians that were titularly independent. I'm not a military historian, but I know this was something that the British did (with American slaves) during the american revolution, the US forces did (with confederate slaves) during the American Civil War, Napoleon's army was legendary for recruiting people they conquered, and the US did with 'indian auxiliaries' during the era of the conquest of indigenous America (the spanish also did that; so did the french and british). Those are just off the top of my head. The real question is where did you get the idea this wasn't much of a thing?