On Mercury, I found siege units almost completely unnecessary as I usually develop a tech advantage pretty quickly.
On higher difficulties, I've seen siege units get more useful as I no longer can spam a single-unit army to take things over.
The problem with siege-units, though, is: either make them have to set-up, or make them unable to fire over terrain, but not both. I mean, half the time there's forest or hills or mountains blocking every other city. I'm just thankful the engine allowed canyons to not count as mountains, otherwise a lot of cities and units would be able to be hit by, at best, one siege unit per turn.
Right now, even mid-game siege units often have to
a) Set-up
b) Be clear of hills/forest/mountains
c) Be in range of the target city's retaliation
Those 3 things are just a bit much when some siege units have incredibly low hitpoints, and, on top of it, the siege units often don't do enough damage against cities.
But the worst, and I mean worst, is the Supremacy unit that has 1mp, has to set-up to attack, and has pretty low health/strength when defending. I mean, yeah, whatever this unit is called does great ranged damage, but it has 1mp and has to set-up, meaning it can't fire for two whole turns after moving into the tile it wants to fire from. This would all be balanced off by the extra range the unit has (3 rather than 2), but it can't fire over terrain, meaning the extra range is often a waste as at least one forest or hill will be in the way of the target across the longer distance. Just miserable.