What if you are playing a Viking era campaign? Spies are really useful if you want rapid expansion, which is quite important for the Welsh early on, for example. Also, the AI tends to put up boarder forts or at least watchtowers, limiting the offensive use of your spies, IIRC. I think that the balance is not too bad in Viking era, though I wonder if the AI would make more effective offensives if it used spies to help hold down conquered territory.