It is more of a compounded (is that the correct word?) issue.
First let's delve into the issue number 1 - connected to the imbalanced results - AI.
AI as was often mentioned - performs attacks with almost zero chance of success constantly with all factors being against it. (Low planning bonus, bad terrain modifiers, fortifications, lack of the MIL high command boosts, bad equipment/manpower count in divisions, lack of air superiority, being backwards with research, rigid and not the greatest templates etc.)
Now let's see how constant attacks tie even more to the 'negative' factors. Constant attacking means you do not get planning bonus build up, equipment/manpower goes down etc.
If AI divisions will perform attacks over and over, with having some distance to the front it may even result in them missing/not getting replacement equipment and manpower.
Equipment and manpower also have double dipping effect on division stats. Division with 90% equipment (depending on what is missing etc.) will get less stats (not necessary 90%). Division with 90% manpower also gets 90% of combat stats that it would have from equipment.
So division with 50% combat stats from equipment (let's say division of 10 INF with only 500 Inf EQ) and 50% manpower will get only 25% of the combat stats -> this makes it even worse for constant AI attacks.
AI will often not get that much of a breakthrough (mostly infantry attacks) and as such it will deal even more serious blow to their manpower-equipment problem because of the relatively high ORG of the infantry divisions.
Attrition also plays a role in this (player will minimize attrition suffered to the divisions, resulting in less equipment lost and lower % stats missing) while AI will often disregard the issue.
And there are probably more and more factors that lead to the imbalanced result. (combat stat inflation, multiplication of all the modifiers etc.)