I think AI can have a real place in this game although I don't know about the LW arena. In the AvA they can be used to run more historical missions and can be used to seed the arena so to speak, since players entering can take over AI slots.
It's sort of fun in a fog of war sense not knowing whether you are going to run into a bot or a human.
They work great for huge bomber formations which players can escort and intercept. It's also fun for a team of players to fight together against an AI force.
And of course when nothing else is happening at least one would be able to play something.
The mission system made some strides but right now the game update is priority. Once work returns to the missions system you can bet I will be building a whole lot of stuff.
I'm not sure if the offline missions still work or not but hopefully you can at least check out some of the things we have done with the briefings, terrains, and mission beginnings here.
http://bbs.hitechcreations.com/smf/index.php/topic,364001.0.html