Well, you are saying that you want a better AI. I cannot disagree, but there are also limits to what Bethesda can do right now. The AI will be better with the next game, and the next, and so on. It keeps improving and it has gotten better compared to the previous games. Perhaps try to see it as a progression - it is never perfect but only gets better with each game.
The AI hasn't really improved since Morrowind. Schedules have been added but NPCs and creatures still make just as "dumb" choices as they did back then. They still don't look where they're running. They still happily commit suicide by hopelessly attacking an enemy they don't stand a chance of defeating. Also keep in mind that BGS had a valid excuse in the number of available cycles being limited when they made Morrowind, but the same isn't true in Skyrim. There's nothing preventing an NPC AI routine from checking the number and type of enemies and running away scared if they're above his level of combat ability.
What this means is of course that there's also really no reason to expect the AI to be any better in the next game, particularly not if nobody calls them on their sloppy work to that extent in Skyrim.
You can also take a closer look at the NPCs' reactions. I do not find them too unrealistic. If people, even today, would always react as they *should* (and not as they do) then we had a lot less problems in the world... They are only common folk, they are not dragonborn. They are living in a harsh world and some choose to die fighting, others beg for mercy and die just the same. If they all ran and hid then it would be certainly smart of them, but if they were this smart then they could have build ballistas, too, and just shot the dragons themselves. It rather seems that many of the people in Skyrim are still in disbelieve over the return of dragons and they act stunned when they encounter an attack. So their dumb behaviour is not too far off from reality.
This has got to be the most ridiculous attempt at after-rationalizing that I've seen for a long, long time. Just because people don't do the right thing every time does not mean they'd all suddenly stop caring about self-preservation. What you're saying is that because people are dumb, it's not a problem that the AI is ridiculousle braindead and has all the NPCs throw themselves onto the grenade. There's no way in hell you'd ever see women, old men, and soft city dwellers calmly stand in front of a dragon and get burned to death, and thinking otherwise is like thinking that trench warfare wasn't so scary and that he who says there aren't atheists in fox holes is just a wimpy little girl.
Going against that sort of enemy is tantamount to dying and death is generally scary to all but the most hardened warriors. Not having any damn NPCs run away screaming like they damn well should is simply moronic to look at and has absolutely zero chance of happening outside of bizarro world. No offense, but that's how it is. I realise that you really want BGS to have made a brilliant AI, but they didn't. They [censored] up and instead gave us Morrowind-AI with schedules and better patfhfinding.
That is just unrealistic and I think that you are expecting too much. Think about the following: Who has got a linear behaviour to threats? Only trained professionals do and are capable of estimating a threat level. However, common people will do the most illogical things when under pressure. Unless they do regular "dragon drills" will they act stupid.
You think it's unrealistic that people will spend a fraction of a second pondering "can I take on that obviously hostile enemy (or group of enemies)?" while you don't think it's unrealistic that nobody actually flees? Have you ever actually seen people responding to any kind of incident? Flight is a natural response to any feeling of danger. Fight is usually a distant second resort, something you do if you can't run but not something you're going to do right away.
And having a threat level that can be matched with an NPCs confidence or what have you does not mean the response has to be entirely linear. It's so very easy to add a random factor to simulate that maybe the NPC is too dumb or too brave to recognize the impending death centence. All it takes to implement a much more convincing response to the mythical enemy of doom is the will to try. Unfortunately, BGS lacked that will.
Edit: And then I moved on to read page 2 of this topic and saw no less than two other users say exactly the same as I had just typed. Darn. Well, maybe I'll learn to read the entire topic before responding some day. Maybe.
