They add this privateer that can capture everything under the sun including BBs and CVs.

I cannot believe the devs allowed this ability into the late game. Keep the privateer through the Age of Sail, after that, make it obsolete as soon as steam power is researched. Perhaps they should change the privateer to have only a chance of some sort, to capture a ship. Certainly, do not let this prize ship promotion upgrade to more modern vessels. Also, a privateer that tries to capture a modern ship should fail miserably. This way the human player gets rid of them, because at that point they would be of no use. The AI has trouble even using its own privateers, let alone trying to counter a human with such an advantage. BBs are also way too powerful for bombarding cities. MadDjinn is right they should be turned back a notch or two. The game needs to be made more challenging.
Watching these LP vids has shows how lacking the naval AI really is. Apalling to see this on Diety, especially when the devs assured us the naval AI is devastating and this and that. On top of that, many people are saying the AI fighting prowess is tough on harder levels. If they think that they need to watch this set of videos. They would be in for a complete shocker.
Anyway, this is how I see it.
MadDjinn, you play an excellent game, none of this is your fault. Your simply doing what is available for you to do. No one can fault that. I certainly don't. However, I expect some changes to be made, but who knows what the devs will do.