The problem with monsters as I see it is much more complex then that they aren't simply tough enough. There are tough monsters, so tough they are unstoppable early game in fact. The problem is that the tough monsters are incredibly random and the more common predictable ones are extremely easy to eliminate early game.
Due to the current system we have two types of monsters. The first is comprised of big tough unstoppable monsters like Drakes and Dragons that sit around until someone builds beside them and then they wander off to attack some city on the other side of the world. The second group is made up of easy to kill lairs that start off very weak and grow stronger over time and produce wandering monsters. These wanderers are extremely easy to kill and don't attack cities anyway. Not that they could kill a militia. While this second group grows stronger over time they never get that tough.
Thus we are left with 2 extremes and no middle ground. On one hand we have totally random city killing dragons and on the other we have fodder for farming. Neither of these two types of lairs actually limits expansion either since the tough monsters have a habit of ignoring the cities built beside them and taking a hike. To compensate for how ridiculous it is to have dragons attack you early game they have constantly made monsters weaker and less aggressive. However no matter how much you nerf them dragons will still eat early game players. Instead this nerfing has simply made the second group too weak.
The fix is to make it so that either lairs give off a ZoC which you can't build over, or so that when placed under ZoC monsters will actually attack the source of that ZoC, return home and not wander off. This way those tough monsters will actually limit expansion instead of just sacking random cities. Also some of the weaker lairs that spawn wanderers need to have tougher guardians to start, so they can't be eliminated early game, and pretty much all of the weaker lairs need to spawn more powerful wanderers over time. Those shrill lairs that only ever produce 1 wandering shrill are a good example of this, whats the point of a monster weaker then a militia?. Late game monsters need to stay in their areas until late game, early game monsters need to scale better and produce much tougher wanderers, and medium monsters and wanderers need to exist. The key is good progression so that over time players can claim more and more land from monsters as they grow in power.