Most of the heroes of the Fifty Years war have an epithet associated with them. Elmdor is the Silver Devil/Silver Ogre. Cid is the Thundergod. Barinten is the Weapon King. Zalbag's epithet, as given to him by Denamunda IV, is "the Savior of Ivalice," although the game never quite offers context as to what he did to merit it.
What I'd like to propose is not only an explanation as to how exactly it was that Zalbag saved Ivalice, but also what it means to have a character like Zalbag be positioned as a national hero prior to the Lion War. Something that I feel gets overlooked with Final Fantasy Tactics is how heavily the shadow of the Fifty Years War lies over the setting, and how the characters Ramza finds himself butting heads against are affected by the past. I think that there's something significant to the fact that in rehabilitating Ramza's image, Alazlam is shifting not only the historical reputation of Delita I but also the historical reputation of House Beoulve itself. Until the release of the Durai Report, come 400 years too late, the Beoulve who would have looked most like a JRPG protagonist would have been Zalbag.
So what did Zalbag do to save Ivalice? If one looks to the timelines concerning the Fifty Years War and the life of Denamunda IV, the most reasonable answer is that he did something in relation to the Romandan invasion. According to the great big tavern rumor concerning the Fifty Years War, the Romandan invasion was an event lasting three years, at the end of which Denamunda IV died. If one looks to character biographies, Denamunda IV's death would have to be at least seven years prior to the start of the game's narrative, as Ruvelia Atkascha is stated to have married King Omdoria III at the age of 20 and she begins the story aged 27--meaning that at the time of Ruvelia's marriage, Omdoria had succeeded his father. Given that it is Denamunda IV who names Zalbag as Savior of Ivalice and Zalbag starts the narrative of Final Fantasy Tactics aged 28, it make a great deal of sense that whatever Zalbag did occurred during the period of the Romandan conflict. Using the tightest possible timeline--in which Romanda's withdrawal, Denamunda IV's death, Omdoria III's coronation, and Ruvelia's marriage all occur in the same year--Zalbag would have been 18 at the time of the Romandan conflict's beginning. While it's theoretically possible that he did something worthy of the king's commendation prior to that age (JRPG heroics, after all, tend to be the province the young), it seems obvious that Zalbag's youth was impacted by the Romandan invasion. Prior to this phase of the war, the campaign had been one in which Ivalice was the aggressor attempting to invade Ordalia. Despite some jingoist statements from Ramza and Cid about the necessity of fighting the good fight to keep the Ordalians at bay, the first phases of the war were unquestionably concerned with getting Ivalician troops to Valowa rather than keeping Ordalian troops away from the eastern border. Romanda's entry into the conflict, however, was an event in which Ivalice actually was the country subject to an unprovoked attack from a foreign invader: a prime instance in which Ivalice would need saving. Given that Romanda was first and foremost a threat to the western provinces, it makes an awful lot of sense that Zalbag, as a native of Gallione, would be part of the effort to repel said invasion.
So, if we accept this theory, what does that mean with regards to Zalbag and the type of heroism he stands for?
One of the major generational divides in Final Fantasy Tactics is the difference in the outlooks between the game's young, idealistic and/or ambitious 16-18 year olds (Ramza, Delita, Izlude) and the game's older, more cynical adults (Gaffgarion, Dycedarg, the two Dukes). Even though many of the teenage cast members hold very different beliefs, they share a sense that the future can radically change. This isn't so with most of the non-demonic adults in the game, who--however much they might vye to change who is in charge--don't actually seem all that interested in restructuring society. I personally hold that, while these differences in outlook might easily be chalked up to JRPG-typical tropes concerning youthful idealism, an elegant in universe explanation is that most of the people in Ramza's age cohort are coming into adulthood at a moment when a war is ending and therefore have the ability to see potentialities at prior generations locked in a seemingly unending conflict weren't always looking for. Even Wiegraf, the adult character who is genuinely invested in societal change, comes to frame his revolutionary ambitions in terms of what his men's deaths might win for a future generation (and he ultimately comes to let his ideals lapse as he seeks to enact change through an institution with ingrained societal power).
What I think is noteworthy with regards to Zalbag in this divide is that he is uniquely positioned to embody the complacency of the older generations while lacking their cynicism. Unlike older characters who experienced the Fifty Years War as an unending slog towards Valowa, Zalbag may well have come of age at a point where there was a concrete threat to the nation and the provinces were united as Ivalicians in repelling it. Coming of age and becoming a hero at such a point in time--all while having the privilege of the Beoulve name--Zalbag is perfectly set to become an upholder of the status quo who genuinely believes in its legitimacy. His introduction to warfare was not as part of the lost cause of Denamunda II, who sought to invade Ordalia and lay claim to its throne, but as part of the age of Denamunda IV, a heroic warrior king who is Ivalices's obvious equivalent to the English Henry V. I would argue that this history sets Zalbag up for both the callousness and naivete people read into him in game, as he exists as one of the few characters able to believe that the mechanisms by which Ivalician society operates are just.