A game's systems work together to create an experience--in order for one to shine the others must be well designed, crafted, and integrated. Sometimes fixing a camera, tuning NPC stats, or adding some scripted chatter will do a lot more for the perceived intelligence of the opponent than a more sophisticated AI algorithm.
I think it's easy to lose sight of the ultimate goal (making a fun game) when coding AI, because, let's face it, making brilliant AI is a sexier challenge than paying attention to all the little details the make a level play well. Ironically, one of the problems in game AI these days is how to make the AI a little dumber (but not a lot dumber). It's easy to make a chess AI that will beat most people, but getting one's ass handed to one 30 times in a row is tiring to say the least. On the other hand, an AI that can be beaten handily isn't much fun either.