Ugh, Egypt. Yes, I really do hate them in this game too.
I have just finished a long Scipii campaign with the Mundus Magnus mod (so RTW 1.2), and there Egypt was a superpower too.
Around 230 bc I started a war agains Egypt, and this was their empire at that time:



It was 190 bc before I conquered their last province (yes I am a veeerrrrryyy slow player). I know it sounds ridiculous but I really smiled (no I almost cried of joy) when I got the "Faction eliminated" screen. I even saved a screenshot to caress the moment, lol.
This is a screenshot from the turn before I conquered their last town-with-family-members (in present-day Arabia), so the two African provinces (conquered by me but sacked and abandoned so full with "Golden peasants from hell") turned rebel:



Anyway, I decided to attack them from two fronts. First only in the Libyan deserts, but after 10 years or so I launched an attack in Minor Asia too. But they kept on sending army (often full stacks) after army in that game. Only when my Northern Army reached Jerusalem and my Southern Army conquered the Nile Delta, they showed their weakness for the first time by bringing peasants to the battlefield. I swear that I didn't see any peasants until the final phase.
I also trained a few "uber-assassins" and waited for the family members to leave their towns and march up to their stacks to kill them. But even then I couldn't "contain" the Egyptians.

I must admit that I tweaked down the stats for their chariots a little (did that somewhere mid-game), so I thought that maybe increasing the recruitment and upkeep cost too would be a good way to tune down their superpowers a little? Don't know if anyone tried this yet?
On the other hand, they provide a "challenge"