It does actually have a good AI, but once you scratch the surface Dark Avatar is beset with critical bugs in many areas. I haven't been able to play a game without getting affected by some bug or another.
The harder levels of difficulty simply give the computer players economy and production bonuses. When given an unlimited amount of resources (like in a huge map), no matter how high you set the difficulty, you have to be pretty stupid to be beaten by the computer In smaller maps, the computer becomes much more difficult, but the strategies to defeat it are also much more limited, and much less fun.
I also suspect that Stardock outsourced much of the coding for the game. After reading their API docs, either one of their coders spells at a 5th grade level or is learning English still. While that doesn't necessarily mean anything bad, the disconnect inherent in outsourcing would explain the nature of the bugs I am seeing, and why they have been slow to patch the game.