People saying Civ is not solely about war are correct, it is also about exploration, expansion, commercial development, culture, science, religion etc... and the AI seems to have done an okay job in those departments (apart from some obvious bugs like Russia expanding only in the poles, which I guess is a result of its preference for tundras but that can be easily balanced I supposed)
Now, war is also an important part of the civ game, because it represents a constant threat. Your cultural empire might be destroyed by the Scythians, the Brazilians stole your city spot, you need that Iron the Romans have, Fredrick controls all of the city states of Europe and you´re playing as Pericles, all of these are causes for war.
If the AI doesn´t represent a challenge (it doesn´t have to be perfect), then you can build your culture up and not be afraid of any outside threat, no need to build military that slows you down. Brazil stole your city spot who cares? In a hundred years you´ll take the city without opposition, need that Iron? Just attack Rome, you know you´ll take it from them... starting next to Mongolia with Genghis programmed to go on a rampage?... no need to be afraid he can´t even scratch your city walls
The point of war is that it creates a balance, a constant threat or weapon depending on the human player´s style. But it can only be a challenge if the AI is able to play with this dimention of the game.
The fact that the AI has never been able to win a domination victory against other AIs, that it does not upgrade its units and that it does not attack with the units it produces and just lets them hang around is a catastrophe, because it means the AI can´t play the military game which, besides representing a possible victory path, is an important element to the balance of the game. That´s why it baffles me that Firaxis openly shows the defects of its AI just 1 day prior to release. This Should not happen. The AI we all know will never be perfect and it doesn´t matter, it only has to be a challenge for the human player. But it has to at least be a challenge