I've played an number of patch M games with AI Doviello now, and I think their poor performance is caused by two problems related to their Worldspell. In every game I've played the Doviello have initially done just fine: expanding, teching, building an army, and attacking a weak neighbor. That's when it all goes wrong.
The first problem is that they automatically cast their Worldspell the turn they attack (rather than waiting until their army is next to an enemy city). This puts the Doviello into immediate economic stress, and they handle the problem poorly. Rather than combining wolves into Wolf Packs until costs were under control, or bottoming out research for a few turns until the Wolves can be used up in combat, the Doviello instead delete units. This would be inefficient and wasteful if they were deleting wolves (why cast the Worldspell at all, then, just save it for defense) - but what happens is that they keep the wolves and delete their other units! This is catastrophic, because it eliminates any hope of victory in the war they just started. If they had waited until their army was in position then they could have attacked with the wolves in that army. Most would die, and no support would every be paid for them. Then, wolves away from the front could be combined into Wolf Packs until costs were brought under control, and those Wolf Packs then moved toward the front to be used up to make room to support regular reinforcements.
The second problem, which I believe was already mentioned earlier in the thread, is that the Doviello no longer move their wolves. This finishes the Doviello off. After they have deleted many of their non-Wolf units they are then stuck supporting a large number of units with which they can't do anything. Often, many of these wolves are outside Doviello borders, so that they are also paying both Unit Cost and Unit Supply for these units. They don't move these units to attack their enemies or defend their cities, and the result of being stuck in a war with (an effectively) reduced army support potential is that they are either defeated or else simply never grow.
I'm not sure why the Doviello no longer move their wolves, but I know that they used to do so. Perhaps this is a recently-introduced bug that can be fixed in patch N. Addressing the other problem might be more complicated. If nothing else, at least the Doviello should be made to delete units from weakest to strongest if they feel that they must delete units. In this way their Worldspell would be wasted but their regular combat troops (and hope for victory) would remain.