Well if you are wondering if you can still have...
...a fast guy with no armor and a pair of shoes run circles around the map while armies try to chase after him and you slaughter them without taking any damage.
or
...a single unit with some basic armor that can take on a million spearmen without breaking a sweat.
Then the answer is "yes". The AI has no clue how to fight in a tactical battle and there is little to no strategy outside of remembering to give your warriors some gear.
In that regard try playing on Ridiculous where spiders have 50ish starting health and still only do 3 damage
I also experience numerous calculation, graphic, and crashing bugs during tactical battles.
Though do not let the above deter you from trying out Elemental in 1.1 (assuming you haven't been playing latest BETA) its come a real long way!
I think AI levels should be a + (or - where low is applicable) to all the rolls the AI makes and all costs in mana, gold, ppl, materials,turns etc. This would scale as the game move though turns, AI balancing could be done via these defaults and not tweaking a new AI per difficulty (or lots of little bits in the file, not sure how the AI works) Part values would be rounded to favour the AI in harder, and work against it in lower settings.
Novice Rolls twice, takes worst number/Costs at 160%
Beginner Rolls at -20%/Costs at 140%
Easy Rolls at -10%/Costs at 120%
Normal Rolls at normal/Costs normal
Challenging Rolls at +10%/Costs at 90%
Hard rolls at + 20%/Costs at 80%
Extrema Rolls twice, takes the best/Costs at 70%
Ridicules Rolls twice, takes the best with +10%/Costs at 60%