Perhaps the heroes are part of the overall balance? Now, T'ien C'hi, who is often said to be too weak, has strong heroes. They might not be able to kill Bane Lords, but they have wonderful abilities and all of them are highly thematic.
Also, the point of all heroes is not to fight. Some can command more units that your normal commanders, some have special abilities (Master of the Iron Crutch!
), some offer your nation magics they don't usually have (that high), some are just thematic, some offer more of what you already have and some are combatants. Good or bad, it doesn't really matter. They weren't developed to rival gods! Good heroes are special abilities of some nations, just like type of armies, heat preference, priestly power and magical specialisation mentioned in their description.
Also, imagine your opponent's face if Spornsjarl the Vaetti Hero (or champion, or whatever) gets the Heroic Hitpoints -ability and doubles the hitpoints of his bigger "friends"...
That will probably never happen, but who knows. This is
Dominions II, after all!