Yes.  This has been a pretty common problem with the AI since the game released.  Some will argue that this is 'realistic' behavior and that it makes sense for the AI to leave a fight that it supposedly knows it'll lose but I maintain that there's nothing realistic about falling back to the last remaining asteroid in ones empire and not bothering to retaliate until ones homeworld is being bombarded.

The patches have improved the frequency of this happening slightly but last I saw, it was still a common issue.

I agree the AI is still too cowardly but on the other hand it wouldn't be very much fun if it stood to fight when it had very little chance of winning.  Once you lose an entire fleet in this game, you are effectively out of action for 10-20 minutes, unable to make an effective attack or defense.

The key to getting the AI to fight you is to use *actual* strategy, unlike what you'll find in other RTS.  What I mean is, "build a wall of units, attack his wall of units, may the best micro win," doesn't work here.  Make the AI think it has a chance of winning or, like any human opponent with a lick of sense, it will run away as quickly and as far as possible.

My only really serious issue with the AI is its total inability to comprehend the idea of attacking in more than one location at a time.  While you, the player, are forced to think of clever ways to win fights, the AI still only knows "build wall of units, attack".  The AI desperately needs improvement in a lot of ways.

Hey Stardock/Ironclad.  Make an expansion that turns the AI into something a tiny little bit closer to Galciv2's AI (I know it's not possible in realtime, but make it A LOT BETTER THAN IT IS) and I'll gladly pay $10 for it.

It's sort of ironic.  Stardock's only two real games - GC and Sins - are complete opposites of each other.  GC has awesome single player but no multiplayer, while Sins has rather weak single player but positively epic multiplayer.

If you lose every planet in your empire by running from every fight, you're effectively out of action already.  I suppose your mileage may vary but for my part, having at least one decent fight would be better than wiping the entire opposing empire uncontested.