Do you really need to make any code alterations? Table edits alone should remove all the damage and rate of fire penalties the AI is shackled with.
Take away the debuffs that difficulty level imposes on the AI, and they're pretty capable of ripping the player apart.
I've already tested that, and I can ensure you that it won't work.
Please note that
fair fight and
insane difficulty are two separate things. The change you proposed helps with balancing only in a partial way. The AI needs better
maneuvers to increase the rate of survival.
What he said. Pretty much all of the nerfs are controlled via tables.
I doubt it due to my personal experience in tabling. Changing the tables won't alter in a radical way the complexity of the AI's maneuvers.
Also, ironically, I've found it a lot easier to get kills in a big furball in Falcon 4.0 than in Freespace.
Freespace weapons are fairly dumb compared to, say, the AMRAAM. In Falcon 4.0 multiplayer dogfights with large numbers of planes, I could point my nose in the general direction of the furball and maddog-fire all my AMRAAMS without even getting a radar lock. The missiles themselves would pick targets and home in (though, of course, this wasn't a great idea in team games.) Evasion was effectively impossible.
Then I'd eject. 
It's not wise to compare a big furball in Falcon 4.0 with a classic FreeSpace dogfight. First of all, you're basing your personal opinion on what can be pointed out (in FS terms) as
secondary and their
homing capabilities. Those factors have little importance when it comes to short range
primary weapons
and good maneuvers.
Your example doesn't make sense.