Excellent explanation, Brad.

If the AI is being anal like that then I guess the economic penalty is a fair trade-off. The alternative would be programming it to be less fussy about resource wasting, but I suspect that would add stacks of code and the bugs associated with adding stacks of code.

A human player could still keep up with an infinitely anal AI, but it would have to be via superior strategy, rather than resource fiddling. Guess the setting where the AI gets no penalty will be the one for me.
For 'Grifman': The slider I was talking about wasn't one for the intelligence of the AI, that would obviously be an absolute nightmare to program. What I meant (and what I was referring to) was a slider to adjust the percent of normal economic revenue that the AI receives.
So the default might mean it gets 50% of what a human player would get. The "hard" setting might be 100% (ie; the same as what a human player gets) and the "Elite" level might be 150%, giving a 50% bonus to the economy of the AI.
Then when you're starting out in the game, you could penalise the AI fairly heavily. As you start to get into the game, subsequent games you could nudge up the slider on the economy, plus nudge up the intelligence levels of the AI.
What Brad has said sounds good, even if it's a bit misleading. I'm content to let the differences lie, though.
At least until I get the game and am, of course, proven right.