but how are we supposed to compete with 20 officer fleets then?
You can have tons of s-mods, better ship loadouts, good officer builds, and you can capture some objectives to give you more deployment points. You can also pilot your flagship and make a bigger impact than any of the officer'ed AI ships on either side can make.
I'm not saying balance or difficulty is perfect or some such! And that's kind of subjective, too. But you definitely don't
need mercs to beat any of the toughest challenges in the game.
I'm actually looking at officer counts in AI fleets right now, and... well. I'd love to know more about the specific types of fleets that are causing players these difficulties. Is it limited to bar/contact bounties? Because regular faction fleets don't generally have that many officers. Neither do most of the publicly-posted bounty fleets; they have some extra but it's not, like, every ship - with the exception of the Hegemony deserters, that have a maximum of 21 total once the bounty is maxed out, which, yeah, is a lot.
But if it's mostly top-level bounties - and specifically bar/contact ones - then these are intended to be challenging fights. And the bar/contact bounty mission even includes a mechanism for letting you pick the difficulty you want.
The player gets to build s-mods into their ships. I suppose that could be a way for top-end fleets to go, too, instead of overloading on officers quite as much. IIRC initially I didn't do that because then the player would just recover a bunch of ships with s-mods and building them in with story points would feel like a waste. But that was before s-mods were being stripped out of recovered enemy ships, so maybe that's something to revisit. In some cases it'd feel weird to have the ships be too high a quality, though... hm.
I'm wondering whether "too many officers" is not directly the problem. It may just be a combination of several things like "ECM is too oppressive *with* that many officers" (which has knock-on effects with making the AI too passive), "the rewards for the top-end fights are not high enough", and even things like the "elite helmsmanship bonus applies while venting/overloaded and makes it too hard to finish off certain enemies". The ECM thing is probably the biggest issue right now, though - I think it's big enough that it makes it difficult to evaluate other things accurately.