Biggest problem with Sparta as an AI faction is not just its one-city start, but it's landlocked one-city start, bordering on only one other region - Athens. Even if/when it expands, they can never trace a trade route back to capital. This obviously sorely gimps their income, as they can't ever get trade going. Apparently AI Sparta will gladly war on neighbors (those small Illyrian factions)...but never Athens (and vice versa).