Yes, I agree the single most lacking aspect of Starsector right now is the lack of a competent AI. The game revolves around fleet combat. That's where the game should really shine, but it doesn't, and the single biggest reason is how the AI works. Let's start with the gameplay design.
By design, the AI does *not* carry out your commands directly, as it would in a traditional RTS. You tell it to "go here" or "attack this" and it may or may not do that. The stated reason is that the ships are themselves acting like people would, i.e. they're not going to just march in to their death or whatever the same way you can command zerglings to run in to their death. You also have a limited number of command points, the purpose of which is to limit your control over the other ships in your fleet. So the whole point is to give it more of a "you're leading a fleet as a ship captain" rather than "as a fleet admiral" feel. In other words the other ships, by design, have a lot of autonomy, and the player is more "just one ship within the fleet".
That autonomy would be great if the ships were good at "reading" the battle and understanding the role of their ship within the context of a battle, the same way a human player can. Unfortunately the AI is pretty poor at doing this. Also, what the AI is doing is pretty opaque; it's difficult for the player to figure out *why* a ship is backing off, or why it's continuing to advance into multiple Brilliants when it's at 90% hard flux, etc. There are many other factors that the AI is trying to account for that the player may not readily notice. So overall what the player sees is an AI that doesn't listen to the player, and that alternately seems to either stay away from battle, or rush headlong in and suicide, without apparent rhyme or reason. You get ships which you tell to defend a location, only for them to run off chasing some frigate and then get surrounded and die to enemy ships halfway across the map. Or you see ships at low flux staying away from battle, while the ships with high flux committed to staying on the front lines, I think because the AI has some sense of "once another ship gets close enough then it's time to commit your weapons and fight" as part of its "fight or flight" response. Thus, paradoxically, the ships that are the most vulnerable (high flux) stay in and fight, while the ships that are the strongest (low flux) tend to stay away. This is obviously the opposite of how the player wants the ships to behave.
What would help are the following:
1. "Command points" should be renamed. Maybe "objective" or "goal" whatever. If the AI does not directly follow the player's directions, but instead tries to do its own interpretation of the directions, then it really shouldn't be called a "command". The word choice itself implies AI properties to the player that the AI doesn't actually possess.
2. The AI should apply the player's directions more "unquestioningly". If the player is giving an order to the AI, this inherently means that the player is overriding the AI's autonomy. From a gameplay design perspective, what the player is really saying is "whatever you've autonomously decided is incorrect, I want to supersede what you're trying to do". For example, if the AI is commanded to go somewhere, that really means it should try to go there, not continue chasing whatever frigate it happened to be fighting at the time. In this case the player may be trying to tell the AI "you're getting too far away from the fleet, go back to the fleet". Currently the only way I've found to "force" a ship to disengage is by using the "avoid" command. However, that's very unwieldy, since it's a blanket order and *all* ships start moving away. Many times, it's that I want a *certain* ship to move away (for example, I see that a ship is at high flux and/or it's about to get flanked, but it is continuing to charge in), not the entire fleet.
3. More transparency as to what the AI is doing. I think a lot of the player frustration is simply that the player has no clue *why* the AI is behaving the way it is. For example, in this current release it seems like the AI is overly shy when there are enemy missiles, so many times even when the player orders the AI to charge in, it'll continue to stay back. (I suspect many of the complaints about the AI not being aggressive enough are due to enemy missiles.) There is very little documentation about how the AI functions, nor about how to use the tactical map effectively. This game does not have a "replay" feature and battles are randomized, so AI issues are difficult to reproduce. So if the game at least displays more info about how the AI is thinking, then it would go a long way toward figuring out issues with the AI.
4. Ideally the AI should somewhat prioritize not getting too far away from the main fleet unless commanded to. The fleet tends to spread out, which usually means one of them gets surrounded and then dies. Certain commands (like "defend") do help somewhat with leashing ("defend" is nice because after an "eliminate" command, once the target is dead, the ships will go back to the defend command); however, ships still get pulled out of position pretty easily.
I know fixing the AI is a "hard" problem. It's very easy to point out flaws in the AI. It's very easy to load up any battle and point out how the AI is misreading the battle and how the ships are doing the wrong things. But whether or not the game is fun ultimately boils down to how well fleet combat works, and having a good AI is a very big part of that.