Ah, drunken fun in Saturday, and I missed a party where... well in any case I missed a good party that I... let's say shouldn't miss. The reason: too tired for travelling around the country in this week. It sucks, but it's true.
I read your text, and several thoughts came to mind, but this will not be an Orwellian review in any account. I'm not saying it is a bad writing, but I tend to agree with your initial judgement of your work. So please don't take this too harshly, writing is a gift very easily overlooked (and underpaid!). As a side note, 10 years younger, I enjoyed reading and writing, and still today I have considered several times to write a book about the things I find important.
To start the review with the most important observation in in-your-face-style, the text left me with a feeling of nothingness. It's kinda hard to explain what I mean with this, but I couldn't symphatize with any of the characters nor with the general theme. In my experience of literature, important decisions done by the characters require some sort of background so that the reader can relate to why such decisions are made. Also, stories can be told in a manner the reader is forced to change (or at least think carefully) his opinion, but this should be done carefully never mentioning the fact itself, so that the reader reads it between the lines - and preferably subliminally. Too much is changing and too much is told in short time in your story, when flare is starting to erupt. The dialog between characters could reveal the internal problems they each are struggling against. Admitted, it is difficult, but it is one of the best ways to describe something what the author himself wants to tell.
Also, your text bears some similarities with Stanislaw Lem's Solaris - but don't worry, it's not the same at all, but it discusses or makes the reader think about the same topics discussed in your text. Also, the theme is known for much more longer time, in the Middle Ages they were discussing if certain people that aren't guided by Christian faith can be considered humans at all. The same thing applies to any army, if soldier is to kill people, he has to be taught in a manner that the enemy is seen as not human or evil. Adding AI here is again revision of the old topic.
One of the important things in writing stories is that the author himself feels he has accomplished something important, or told a great story! Note that it doesn't need to be so fancy stuff, everyday topics are fine, it is only about how it is said! I once thought about writing a futuristic essay about the future of this country, where the main character would need to shoot his own friends to fulfil the orders of the government (and I have a terrible feeling I actually might see this happen). Sci-fi is great in this respect, since you can blow something totally out of proportion, while still keeping it under control in a sensible way.
I find it very difficult to keep my personal preferenes away from this "review" kind of thing, but there is one thing I couldn't help but to notice: the story is written in a similar style to some scientific books that I read some time ago in university. This means that the story starts with what we have currently (the basic premises) and let's see what happens when we push it a little bit further. While good for encyclopedia style, it lacks the information why things turned out as they did and thus misses the large scale understanding.
I would say that read some old children fairy tales, and think about rhythm and how much is described with a single word in those writings (I try to avoid going too deeply here, since the factor I'm after depends on experience). So, no need to analyze them too deeply (it will ruin the thing), simply read them! Also, if you have a friend/relative (old) who likes to tell stories, listen! The pace of the speech, how language is used, and note how much he can explain with a couple words with changing the intonation, or how he can cancel an embarrassing situation with a couple of words. This is important in the dialog between characters.
This of course depends on person, but what I have seen, the general people find coherent and stylished story more enjoyable than "let's imagine this"-type of writing. But, I myself tend to prefer stories, but I rarely get to hear them nowadays. It is very interesting to listen those who can tell about their experiences in story-like fashion!
Regards,
Mika