You're right that it's probably not possible to use every skill mid-battle. That's why you have to pick and choose. I'll watch the AI closely and see what it's doing.
I do think that some skills should have an autocast option, but I only have 3 skills on my autocast-recommended list (Chemical Warfare, Immunity, Fly my Flaming Pretties). Some are not on it for being situational. Others are not on it because the autocast would make the skills too powerful or the autocast would have to be deliberately poor to avoid being too powerful.
Well I'm not sure what kind of patch could be added now to fix things.
Last night I started Act II by taking the opponent capital that was next to me on the first turn. The odds were literally 0%/100%, and I brought my dragon along. Over two hours later, all recruits gone, I finally won the battle. I used my dragon for most of the time just widdling away the enemy units. When those stopped producing I knocked out the turrets. Then I moved my small remaining army that I had been protecting in the far corner over the map to capture everything. It was actually a lot of fun ... but I wouldn't want to do it again.
It did prove though that if used correctly a dragon can when about any battle.
What difficulty were you playing on? The AI on Normal or Hard should probably react aggressively to odds that much in their favour.
Other than that, if someone is willing to spend an hour or two chipping away to win an otherwise unwinnable battle, I consider that their business, not a balance issue.
