The counter, however, is that the Stranger's empire is brittle. If you're everywhere, you're very susceptible to a focused strike.
Why is it necessarily brittle? A bigger empire means more money and resources to pay for troops, and so more troops to defend a bigger frontier.
I know mathematics are only *part* of the balance, but still: from a purely arithmetic point of view, if you quadruple the area of your empire, you only double the size of the frontier (provided that it keeps the same shape, so there's some assumptions which are only partially verified in practice).
As a result, you have up to 4 times the troops for only twice as much frontier to defend. That's a simplistic model, I admit - the point is just that if each city can provide for its own defense by producing troops or funding fortress to produce troops, then more is always better. It's just a matter of being well-organized.
Even worse: more cities mean a LOT more research, if you build at least basic research buildings. So not only will you have more troops, but they'll be better, too.
I don't think there's enough of a trade-off for large empires/horizontal expansion when compared to smaller empires - especially since you don't have to choose between lots of cities and very "powerful" cities. There's very little downside to expanding a lot, and many advantages. You don't have to sacrifice quality for quantity. The main limiting mechanism used to be prestige, but growth is now mostly tied to buildings, making prestige mostly irrelevant. From my experience, your empire will always be a lot better if it's large.
Trojasmic is right:
So to be good at FE, you need to start your games by cranking out pioneers just like the AI does.
That's just how the game plays out, and that's how I crush hard+ AIs with moderate ease.