I don't think the AI deserves to be bashed that much. It is good at what it does, which is deal the most damage at any given time. The primary reason it targets thorns are that they have low defense and fire vulnerability. Just imagine the AI mousing over your stacks and looking at the amount of damage it'll deal to each stack, and the highest number is always going to be thorns. As players we abuse this mercilessly, and AI doesn't know it's not attacking our "real" units. One potential AI improvment would be for the AI to assign much lower priority to phantoms and summoned units. (Which would lead to all sorts of new exploits)
As for the spells, each AI hero has a small list of spells that it can choose from. Not every wizard has offensive spells worth using. While Pygmy seems worthless to you because it doesn't actually kill any of your units, it does seriously decrease your offensive potential. If you put 3 stacks of thorns next to each other I guarantee it'll cast fireball instead of pygmy if it can. But as a player you deliberately keep your units spread out, and the AI only has a couple spells to choose from, so it chooses the best one at the time. One way to improve this would be to calculate a threshold at which point no spell was worth casting and the AI would save its mana. (Which would lead to all sorts of new exploits)
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