Magic isn’t fair
When I first read this, my initial reaction was to discount it. There is nothing unfair about magic: you only have to balance it, like everything else. But to do so is to discount the years of Frogboy's proven track record. So it's got me to thinking what he is really trying to say, or what perspective it is he is coming from.
I remember an earlier analysis of magic way back even before computers really become common household items. Wargame designers were discussing D&D-style wargames (i.e. board games, counters, dice, all that), and the biggest observation that stood out to me was, they found D&D-style warfare to be a lot more like modern warfare than medieval warfare. If you've got a bunch of unarmored magic users who can throw balls of lightning from their hands at each other, that really is not much different from early modern warfare where everybody's ducking behind cover shooting at each other. Now bear in mind: this was before computers. So there is no AI -- only two wargamers playing each other.
So that leads to the next step in the thought process that is commonly missed: ducking behind cover. We keep thinking sword-wielding fighters will take the front, while magic-users stay behind and cast spells; all out in the open. But guess what: even our own military commanders missed this concept for real. The entire Napoleonic era was spent using ritarded military tactics of amassing musket formations out in the open and two columns facing each other, 20 yards apart. Granted, it wasn't THAT ritarded at first: muskets were wildly inaccurate, and the only known way at the time to deal with it was to amass concentrated fire. But gradually rifled bores came out, and by the late American Civil War the whole idea of shooting each other out in the open just became completely stupid--and that's BEFORE automatic weapons came out. THAT was unfair--to the attacker. The advantage to defense became a bit lopsided. What are we to say if we write a Civil War game w/ an AI, then? That your game is unbalanced?? No--because that was the reality.
Therein lies the reality for you when writing a fantasy game: you have to flesh out all the ramifications on the world you're making when you introduce fantastic elements into the equation. If your battlefield is dominated by missiles of lightning flying all around, do you expect your troops to be wearing chainmail and plate? If you have some powerful magic crystal sitting in a dungeon somewhere that could destroy the whole world if it gets in the wrong hands, will you send a party of 6 in? Don't you think it more plausible that your sorcerer who knows this would alert your entire civilization, and the entire race would send in a whole army? If orcs are constantly raiding the countryside, do you seriously expect your peasants to just sit around in shacks by themselves farming their old farmland? That's why the Wild West had forts--except these aren't Indians, who were sometimes peaceful and in fact were sometimes in the right--these are ORCS.
If you introduce some potentially unbalancing magic to the game, first: that's okay. It happens. Automatic weapons are unbalancing, nuclear weapons are unbalancing--and those aren't even magic. That really happened. But you have to adjust to the new reality--and that means you have to adjust your play to the new reality, adjust the AI to the new reality, and evolve entire civilizations to adapt to the new reality. I don't think it's an "unfair to the AI" problem: I think it's that your new WORLD is not completely coherent yet.