I believe a smarter AI becomes a more challenging opponent, but I think they need some sort of flaw in order to a great AI in order to add a more 'alive' feel to the AI(not stupidity, rather something they can't do or the ability to miss, make a bad decision then try to recover from it or something of that sort). For your proposition they can make this flaw appear less(less bad moves, more precise movement, ect) In most games it would be more difficult to program an AI to be smarter to increase the difficulty without taking away from the easier difficulties(or so I think). If they could do it without losing anything, go right ahead, but I would imagine a difficult job is ahead of them.