You are right, a strategical "balancing" in Brytenwalda is nearly non-existent * ... Mierce and Pengwern are the steam-rollers in my test-games.
While imo. in Calradia (Warband Native), this AI feature is not so disturbing, or better said in my experience, the 6 factions apply their strategical behavior quite clever, and it is just quite balanced, i haven't encountered the same faction-ruler outcomes strategically, even if i play 3 campaign trials after another towards a Rhodok lord.
* I'm registered just today to post or perhaps finding a discussion about the strategy-balance thing, and just found your post, ajaxjs, lol ... totally fits.
I'm playing Brytenwalda the last two days nearly nonstop (vacations), formerly a lot Calradia Native with very little of my own modding (small tweaks only, which i partly even took back to vanilla).
And i must say, this total conversion 'Brytenwalda' in itself is an awesome modding work, rather worth to call it a Warband game expansion, i'm extremely impressed ... i'm a modder myself, thus know what it means to provide such a project (i'm a Total War series modder). ... and since knowing/playing M&B Warband, completely abstinent from Total War and all other games from ie. Paradox and Bethesda ... in the meantime, i absolutely don't understand why M&B is rather a market-niche game, compared to all strategy/tactics/RPG games which i know, M&B Warband rules.
That said, i probably look into Brytenwalda module files, if there is something to do for the diplomatic start situation aka moddable. Perhaps one can do a bit balancing for the small factions. Also, for me as history buff, the complete ahistorical campaign-flow is a bit extra-annoying
(and no, i don't come to discuss realism vs gameplay and such, no chance).