I am not the subject matter expert on this, so take it with a grain of salt, but one thing that was changed is a shift from character level based combat ai level to equipped weapon skill level based combat ai level. (So f.e. you won't see a high level merchant dominate you in battle.) We are balancing this and also working on some other combat related problems.
Perhaps then adding gladiators as well as the lords and companions to tournaments and remove all the basic recruits etc that fight in them. I feel Tournaments should be a fun challenge currently since the change its just a breeze for people with experience even on challenge difficulty. Just a suggestion.