I wonder why you stopped at the first incarnation of the new AI mechanic where the AI would react to the forces of its opponents and didn't tell us about the further improvements. Might it be because otherwise you wouldn't have a point to make?
Oh, come now. Let's be civil, even if you think I'm wrong. ;] If I didn't have a point to make, I wouldn't be posting.
I eventually downloaded and played on all versions of Better AI except for the most recent public release (which was 2/12, I think). I will admit, the problem with my example was extreme, and it was eventually handled a lot better. But really, that's beside the point. I wouldn't have chosen that example if it didn't indicate--to me--a potential problem with Better AI's design philosophy.
As a human player, I'm interested in playing the game to have fun. In most cases, since I'm a competitive player, I have the most fun when I overcome a significant challenge against a difficult opponent. For this reason, increasing my fun and improving the AI were often the same thing.
However, there is a point when fun and AI "strategy" diverge. At the time of its implementation, Blake's new defense logic was an example of that. When I found that it was busted by the AI's advantages, I went into the XML and reduced the AI bonuses to upkeep and unit upgrading, and that did a lot to solve my complaints. However, it didn't solve the fundamental conflict I had with Blake's design philosophy--he was changing AI behavior, not because he wanted to make the AI a better player, but because he felt that human military investments paid off too easily. And to me, that was a low-fun direction.
Now, you might say: "What's the difference, Zooloo? The AI is a better player if it's harder for the human to defeat it. So wouldn't more defenders be more fun for you?" And I answer, sometimes, yes, it can be more fun. But sometimes it can't. It's a matter of implementation.
Blake's earliest Better AI versions made the AI a tougher military target because the AI was playing an overall better game. But the build I described made the AI worse, in some ways, by forcing it to adopt a highly defensive strategy
as a rule. Yes, it was harder for humans to win wars after that update, but it was the result of a tedious and unsatisfying change. By increasing the number of defenders in all cities, it felt as if the AI and I were simply forced to spend more and more money on our military forces, or we wouldn't win any territory. It was an arms race which simply slowed down every other aspect of the game.
In short, Better AI was sometimes designed to stop popular human strategies. And that, to me, is a design philosophy that lends itself to creating less fun gameplay.
If you like, I can dig around in old threads and find some quotes that verify that design philosophy. But I hope you'll take my word, not as someone who thinks Blake is a bad designer (because honestly, his AI logic is very subtle and smart), but as someone who thinks Blake's design aesthetic was sometimes antithetical to player fun.