I think the Original Poster makes some good points here ... and I can see at least a partial consensus emerging in the replies above mine
I do think that Rishkith's first suggestion (to double the cost of all pioneer units) is a BAD idea, especially as it would impact the human player. As dalekdan pointed out (Reply # 7), there is a risk that this would slow early game play to an uncomfortable level. Admittedly, getting the balance just right, in this area, might be tricky ...
On the other hand, I do think that Rishkith's later suggestion (below) is an excellent idea:
... Maybe split pioneers into two sorts. A cheaper one that can become an outpost and a more expensive one that can become a settlement or an outpost.
Its funny, how such a seemingly small thing, can make such a big difference ... but clearly it does, and the FE Devs need to tweak this, until they get it just right!