Yeah, the AI in skirmishes is absolutely terrible. Even on the hardest settings, in space battles you'll be sending fleets of Imperators while the computer is still ****ing around with Blockade Runners as the mainstay of his fleet.
But the campaign is pretty fun, and the AI does actually put up a pretty good fight. Of course, it does tend to suffer the same annoyances of Rome: Total War, meaning that when you have an extremely large territory, you'll be attacked almost once every few minutes, which can be quite annoying when making large fleet maneuvers with your brand-spanking-new Death Star I.