Quote Originally Posted by The Errant
EB is optimized for VH campaign M battle. The Medium in battle will give you enemies that are roughly equal. Any higher setting will give the AI morale bonuses that will allow AI levy troops defeat your elites.
Morale bonuses? They get a big attack bonus (+4 at H, +7 at VH), and a +7 defense at VH as well. I suppose they also get a morale bonus, but the main unbalancing thing about higher difficulty levels is the combat stat increase.