Some of those posts complaining about the AI are outdated; for example, a big problem the AI used to have is that it could not deal with terraforming, but that's been fixed.
The AI in Warlock 2 is about as good as a brand new player. It is reasonably challenging until you figure out how to play the game, but once you understand how to run the economy, how to upgrade units, how to maintain buffs, and which advanced units you should pursue, you will quickly become better than the AI, even when it has resource bonuses. If you really dig in and start to min/max things, the AI players will cease to provide much challenge, though the quest mode can still provide some tense moments. The game shifts from being a challenge to just being a fun doddle with giant rats and fireballs.
Compared to other games, I think Fallen Enchantress has a similar curve, only a little later - it is about as good as a player who isn't very good, so you start out getting the crap beaten out of you, then as you learn how to play it's challenging, but again once you really dig in and figure things out, the challenge dissipates and it's just a fun time crushing everyone. Endless Legend is the same except that you might need to learn new tricks for some factions. I've never played Age of Wonders III but my understanding is that it's about the same.
In fact, I've never played a 4X game that wasn't like this, and I think it's intentional. If the AI played like a good player from the start, most people would give up in frustration before they ever figured anything out. Ideally there would be difficulty levels that were more than production cheats, but realistically that's asking for completely new AIs at every level, and that's a lot of work you can't really charge for - nobody's going to buy a $90 4X even if the AI is great. And in the end it is pretty fun just crushing dudes with Spirit Magic and fully armored dragons.
There are some players looking for real challenge, and this game may disappoint them, but I think the entire genre will disappoint them unless they find a multiplayer scene they like.