Well, Civ 5 not only has bad AI, but is full of bugs and has an awful game engine. You would think that the game would be faster than Civ1, since computer power improved by 1000x, but it's in fact worse than ever.
Apparently, they didn't have enough money to create a decent code for calculating worker movements (which Shafer probably thinks is the same as AI level), and the difference between the graphics engine and AI computation is not clear, we don't know which of the two make the game so laggy (probably both).
I'm also not buying any argument 'people want shiny things the most, screw the rest'. You just need to see which game company is the most successful atm : Blizzard. Wow and SC2 are no way the most beautiful games, they are just finished games with impeccable mechanics, very few bugs, and challenging content.
Wow engine is even not that good and starts to be severly outdated. SC2 contents are very limited compared to SC1. True, Wow is becoming more and more 'add new buggy and unbalanced features', and I hope they won't follow this line, but they are great games for the moment (as diablo 3 will be). The only great fail of Blizzard is battlenet 2.0, where they wanted to restrict players too much (communism did you say

?).
And I would conclude that people play strategy games to meet strategy challenges, not to watch new shiny graphics, or they would play Sims 3.
I'm not too sure about this, make a crappy Civ5 which sells a lot, you won't be able to sell Civ6. That's just narrow minded thinking, you're betraying customer's trust.