But if the UFAI can't parlay that takes out much of the fun, and much of the realism too.

Hmm, that's a good point. I'm just worried that people might view an additional player as much less of a threat than a superintelligent AI.

Also, if Hard Mode has no FAI tech at all, then no one will research AI on Hard Mode and it will just devolve into a normal strategy game.

Hence the necessity of making tech tree advancement random, with player actions only providing modifiers.