It sounds to me that your test case got a bit lucky.
He didn't lose any battles. That's good - very good, in fact. I very rarely lose battles but there are occasions when, due to bad luck or bad planning, I simply find I have a force that is outnumbered and/or outclassed by an AI force. If the AI ambushed a couple of militia units with a half stack of heavy cav and generals, your friend would have lost in most circumstances, no matter how good he is: he couldn't run away and he couldn't have outfought them. So, luck was on his side some of the time, at least.
He didn't use his princesses or any merchants. Why not? Did he work out that he didn't need them? If so, how?
What I'm getting at is that, if your friend had been an economist say, rather than ex-military, he might have tried to make use of merchants and to build trade links and his economy. He'd have found the game much more of a challenge as, without knowing about high-value resources and their locations, he'd have struggled to get a good return from his merchants (to begin with, at least). In focusing on building his economy, he'd have found he had less cash in the early stages than was the case through his blitzkrieg approach.
As you say, he used very little diplomacy. Why? It's there in the game and it can make the whole thing more interesting. Two of your allies go to war: who do you support? One of your allies is threatened by a stronger neighbour: do you come to their rescue? None of these things are essential but they add flavour to the game; by ignoring diplomacy, your friend missed out on all this.
As Didz said, the game does seem to fail to hold its own when confronted with a capable blitzkrieger. Does that mean its a rubbish game or that the AI is rubbish? No. Because someone with a different approach would have found the game more interesting and challenging.
Most computer games (most games of any sort, come to think of it) have weaknesses that you can learn to exploit, should you wish. Does that mean they're all failed games? No.
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