It's a problem with game philosophy, imo. Compare it with the Civ line of games or even Warcraft 3. Firaxis, in Civ 4, decided that they didn't want the end game to drag on in an unfun way. They introduced vassalage so that once you've beaten an enemy, you don't have to hunt for every hidden city they had. You could simply make them your vassal and they count as defeated. Similarly, in Warcraft 3, Blizzard made enemies' units and buildings auto-reveal to their opponents 1 minute after they have no town hall left. It was made to keep players from delaying victories by hiding farms.

CA, on the other hand, decided to make finishing a game as annoying as possible. Once you've hit 100k florins, your generals start getting all sorts of nasty vices and decreases in virtues. Once you've conquered enough land, your allies start backstabbing you even though they have no good reason to do so. In Civ, barbarians become less of a problem as the game goes on. In Total War, bandits get worse, especially once your empire becomes very big.

Some of the dumb decisions done by the AI are basically a function of the "all factions turn against the player in the end" game code. It's pretty annoying and one of the reasons some people in the Org find it hard to actually finish games.