IMHO, it's because when AI fights other AI, it's using autocalc. So, instead of fighting 16 units vs 16, the eggies can front up armies of 3000+ against any invaders and its as if every single one of their units is simultaneously taking part in the 'fight'. Hence, even with inferior troop quality, they can fend off all manner of attacks.

antisocialmunky put it, quite succinctly, as 'peasant spam'. Get some of your priests in there and look at their troop numbers and mix. When you try them for yourself, you'll see just how cheap most of their units are.