Espionage was to powerful in Civ I and II, but Firaxis overcompensated for that in III IMHO. I will always build Intel Agency to know others'armies, and plant spies, yet hardly make use apart from that.
Wonder if the same rules apply for AI btw, this makes it expensive for them as well and since bankrupting the AI seems our main hobby it is preventing AI espionage as well!
But there is no way to verify, AI might be cheating as well.
If the current implementation encourages cheating by human players it should be changed anyway!