i've been thinking and one of main problems is something "the wizard" mentioned. The AI doesn't take advantage of it's victories, it's like hannibal you know? :)
I have lost the occasional battle on the strat map but normally it doesn't really matter, lose a battle in MTW and you've normally lost a province, lose a battle in RTW and you MIGHT MAYBE get seiged, then the AI might actually seige you (it might wander off without having tried as well) and even if you are seiged you've normally got an army/diplomat/ nearby to protect you, that or lots of archers plus stone walls. Either way i think i've lost maybe 5-10 provinces in about 5 campaigns, that just isn't enough. There are some good battles in the start of a RTW campaign but i find once ive got a certain amount of provinces it becomes just a matter of time. MTW/STW were similar but not as bad, i think it's more to do with the new campmap AI then anything. Lets say you're the spanish in MTW you take all the iberian pennisula and head down into africa so you could advance up to say egypt with your army. Now lets say you've got your big stacks on the border, and of course nothing in all the provinces behind it cept a few peasants. If you lose that main border force you KNOW your in trouble, that in a few turns the enemey will be marching back up through africa into your homelands and your going to have to do something about it. In RTW if the same thing happened and an army of my borders got wiped out i don't worry. Sure moment o' panic but then i realise it will take the AI 20 turns to actually do anything about my now undefended borders and by then i can have another army/diplomat waiting for them.
I think most of the problems maybe are linked to the campaign AI rather than battle AI which is quite understandable seeing as how this is the first time they've had to program for something like this.