I personally feel that certain AI factions should have double the limit for armies. The reason for the limited armies for the player is to put more of an emphasis on strategy and where to put armies for ideal defense and offensive operations. If you have only 6 armies you have to decide where it's best to place those armies, assuming you can afford them, so you can conquer new lands and to protect the ones you own. The radious mod doubles the number of armies you can field so this problem is pretty much neutralized (I can now field 18 armies at the 3rd level of imperium) but even now I can't defend every town I have with an army, and it's a huge risk I take leaving a border town undefended, especially since with the better AI army compositions they are sending stronger armies against garrisons of mostly tribesmen.
Also I would like to say that in my campaign I have seen both the larger nations like Rome become large as well as some of the smaller ones become large. There doesn't seem to be a discernible pattern, at least not to me.
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