What is really new?

[Sindai]

I'm 100% sure several games already do that. GalCiv certainly does. Developers aren't stupid. If you can come up with a solution in the time it takes to write a forum post you can be sure they thought of it ages ago.

The real problem with diplomatic AI is that it is usually incapable of betrayal. If it is then you have the nontrivial task of making it smart enough to betray the player only when it's logical. If it's not done cleverly and communicated to the user it will only cause players to complain about the AI being "random" and "attacking for no reason."

I think Dominions does fine as a pure wargame. It's not impossible to rationalize diplomatic AI if you change the story just a bit, though. Instead of a single supreme throne the pretenders could just be agreeing to ascend as a pantheon.