So you DO notice it is incapable of domination. What's the point on building armies then? Lets all play Civ Tycoon on our safe sand box. I think your assumption on having a runaway civ on every game is a little far fetched but possible nonetheless (that's the fun part). I think that would hardly happen because a functional A.I would notice this and build a defensive position, and also by telling his neighbours, join wars, you know (in a world with no dead passive A.I's). It would be a nasty surprise to find a runaway civ on a faraway continent indeed, but i don't see this happening without notice in most maps (pangea, archipielago).
I think you mistake me. A Civ that's capable of domination will necessarily be coded to be militarily stronger than any other Civ in the game. That's how it's done. so you can't make them all tactically brilliant. If they're all equally good, then you end up with... Civs that are all incapable of domination! The point isn't that they're bad. They point is that they're EQUALLY bad. If you make them EQUALLY good, then they're no better off.
When you're asking for a Civ that's capable of domination, what you're asking for is coding it so that a Deity bonus level AI lives on the same continent as a Prince level one. That's capable of domination.
Unless you were not building defenses yourself, listened to the intrigue telling you about a big troyan horse moving near your cities, heard your neighbour denounces, checked "military power" on the info screen, not checked your diplomacy status with such civ, or your spies, QUITE NOT RANDOM defeat i would say dude.
In other words, you like the A.I to be incompetent because you hate losing and other players hate that too, am i correct?
You're not getting the point. The point is that having to dig through all that in order to uncover someone taking your capital on the verge of Science Victory is seriously unfun. This is not me or other players. This is basic game design. You don't do that. It's bad design. The AI CAN declare Surprise War without denouncing you. In fact, it can (and has) done that to me while we were Declared Friends. It's part of what it's designed to do - fool you into complacence. But it wouldn't be fun if it did that and then you lost the game without being able to do anything about it, because you considered Intel a secondary concern.
But seriously, don't take my word for it. You don't even have to necessarily lose. Just losing that much stuff randomly would suck for many players. Ask around.