I strongly agree that giving the AI most of its bonuses in the form of a head-start is a mistake. This method does succeed in making the game challenging, but it also makes competition with the AI a highly binary affair. You spend most of the game far behind the AI, struggling to survive and catch up. Then, you reach a tipping point where you pull ahead and never look back. This brief tipping point is really the only time where you're competing on a semi-even footing with the AI, and it's, not coincidentally, the most satisfying point in the game. I often found myself choosing a difficulty level based not on how much of a challenge I wanted but on what stage of the game I wanted to be the most exciting.
What's more, strong starting bonuses dramatically warp a number of game dynamics, even beyond these competitive effects. The early eras of the game are proportionally shorter than they should be. Early game focused human civs can't pull ahead in the same fashion they could in an even start, but neither can mid/late game focused AIs catch up with them later on. Early wonders and religion (and now, presumably, great people) require massive commitment just to be part of the competition. However much or however little challenge starting bonuses present, they make it impossible for the game to proceed as it would between players with default starting positions.
Shifting most of the AI's bonuses to yield bonuses over time would restore the game's intended dynamics, making the game play out much more as a competition between equals. Numerical bonuses would, given proper balance and level choice, allow the AI to progress through the game at roughly the same rate as a human player, albeit through raw numbers instead of skillful play. The AI would be less overbearing in the early game, but it would also be a more persistent threat, with greater ability to recover from early setbacks. Instead of a single tipping point, the game would proceed as an extended back and forth, based on civ strengths, tech paths and periods of strong or weak play. AI bonuses over time would, in my view, make for a better game than massive starting bonuses in every way imaginable, and I'm highly disappointed by Firaxis' decision to double down on this latter path.