[ygra]

For the vast majority of players it's probably irrelevant whether the AI cheats or not. The goal is not to play fair and beat the human usually, but to put up a good fight and make things challenging and, most importantly, fun for the human. Of course, competitive and professional players have different expectations or requirements in that regard.

Still, AI in games is mostly a trade-off. It usually can't take too much resources (because it usually has to run on the same machine the human is playing on), it has to be believable and fun to play against. This usually rules out too fancy algorithms and approaches with dubious returns.

[Houshalter]

I think the majority of players would prefer AIs that are challenging through better strategy and tactics, rather than just being bullet sponges or having better aim. People also get frustrated when the computer wins through cheating, rather than actually being better.