You Stuborn!
For the first post, the initiate problem is not a magic problem, but a AI problem. The lack of a 'barracks' unit is what makes magic an EXPERT faction. It makes it harder to use, but it's still easy to win if you know how and what you're doing.
For your second post, you are yet again complaining not about magics faults, but the AI's faults. In my opinion, the CPU seems to use the initiate > battlemage > archmage morphing quite fine, since I see all of these units during an attack.
Now, as you can see, the AI is the problem, and not neccessarily magically based. The AI should be improved so that they (1) attack in groups, letting slower unit catch up before moving (2) if a unit can harvest for resources and attack, it the former will prevail UNLESS the unit is being attacked, in which case they should attack back (3) if a unit is being attacked by a foe outside their site, they should run towards that unit (4) if an attacking unit can be produced by morphing a harvesting unit, a higher priority for producing this unit should take place (5) if a unit can produce multiple units, where one is more powerful than the other, the more powerful unit is produced more times (how many more times depends on resource cost and how much stronger their attack is).
While not all of the above will help magic, it will help the AI in general.
Now, you asked if magic is equal to tech, the answer is yes, it is, but the computer is not very skilled with magic. The faction itself is perfectly fine, but the cpu isn't the brightest. Then again, its a friggin' computer. COMPUTERS ARE UNIVERSALLY STUPID. WHo made computers? Man. Who coded this chunk of metal (and silcone, and plastic, and fifty other materials)? Man. Man is universally smarter than a computer, and balance should never be compared by how a computer fares against man.
Lets take a look at an example. In video games, I've taken a party of three characters with 9999 HP against a monster with ~50 million HP (for those who recognize this, this is the famed Yiazmat fight from FFXII, which can take as long as eight hours) and win. This beast can have a spell to kill any one of those party members in one hit, and can take them down in just a couple hits with melee. So how do these three people beat this abnomation? Simple, brains.
Ever notice how in video games, we can go through thousands of monsters with one guy and still win? Yet in a multiplayer game, you go against a human, you will need hardcore skills to last long. Human superiorty.
CPU vs HUMAN... The human will always win, except by human error, stupidity, and lack of knowledge. The human CAN always win against the CPU if they have the skill. Computers don't learn from their mistakes. There is few games where CPU can adapt to players behavior, and its still very rough, since computers are predictable, humans are not.
-- Sorry for ranting about that there. I just see no need to compare things when they are controlled by two entirely different divisions. Instead, ask yourself: if I was controlling both of them, who would win? Would it be close?