the issue is the game doesn't know how to balance any faction mid/late game. not to minimize your complaints but it can happen with any faction and I have played enough, read too much, so that I am used to it. The AI doesn't pay upkeep, none of them. the dwarfs do have the strongest economy so when you pair it with no upkeep they can just churn out the best. I don't know if I would say broke just as much as unbalanced, which is splitting hairs a bit on my part.
My longest campaign right now is as Mazdmundi, about 400 turns in. I have won the short campaign but not long. I am fighting the two vamp factions and they are non stop sending armies at me. I just had a battle this week that featured 5 of their armies vs 2 of mine. I won and took the settlement (5th army). It didn't effect their faction ranking in the slightest. they just have soo many armies and so much land to generate them the going is tough. I would say I hold 40% of the ME map, they hold 40% and then the various other survivors hold the other 20% which is mostly ulthuan and the north of Naggarond. it may be 50 30 now in my favor but it sucks.