Agreed in my last game a dragon was unleashed.  I attacked and used an escape spell due to not quite being able to take it out.  The dragon ran around for a while, did not attack cities took out an outpost or two (one of mine and one of the altar), then returned home.  I have wisely decided to leave alone again.  Now there were significant forces in all three of my towns to make intruders think twice, and maybe why it left me alone.

Personally, I like monsters that are agressive and chase people around.  What frustrates me are two things, when they don't chase anybody, and when they don't know when to quit chasing.  I can't count the number of times I have seen Drakes or Obsidian Golems ( aka Obstacle Gnomes by my kids) standing around right next to AI stacks and doing nothing.  You have seen it too I'm sure.  That irks me.  Also, the aforementioned rampaging epic monsters that someone else let loose who decides that I am tastier than anyone else on the map.  I'm not so much annoyed by the fact that they are rampaging, just that they don't kill the people who were stupid enough to annoy them in the first place.

What it boils down to is that monsters don't seem to have motive.  What are they doing and why?  Are they an active part of the world, concerned with protecting their lair, attacking anyone who comes near and even raiding nearby settlements in search of lunch, or are they just intended as static hero fodder?  They confuse me.  They used to at least be fairly reliable in that they would chase after anyone who came too close, which made exploring the early map like being a mouse in a house full of cats.  They were dangerous and you needed to avoid them until you were ready to deal with them, but don't leave it too late because they may decide they are ready to deal with you.  Now, they don't make sense.  Time after time the AI will just walk right past them unmolested.  I am still scared of them, so I keep my distance.  Should I still be scared of them?  Was it just too difficult to teach the AI to pathfind with so many obstacles in the way that they just had to remove the obstacles to keep the AI from whacking into a nasty monster like a fly into a window?  I don't know.  I just wish I knew the rules and that the rules were logical and applied to everyone equally.

Give monster lairs a zone of control. Doing this will do two very good things.

First a monster should usually only wander within that zone of control thus the zone of control becomes a visual indicator telling players that entering said ZOC will incur the monsters ire.

Second make it so that cities and outposts can not be built in a monster lairs zone of control. This will stop the AI pioneer spamming problem. They can make as many pioneers as they want but if they don't clear the land of monsters these pioneers will only be easy pray.

A monster will not leave a lair until another monster is sponned on the lair. This will ensure that lairs aren't left unprotected. When a new monster is sponned it will wonder in the ZOC of the lair unless a faction agros it by attacking it, entering its ZOC, or by taking out the lair. At which point that monster attacks that faction. Scouts don't agro monster by entering their ZOC. A monster lairs ZOC will increase every x number of turns and will produce an additional monster every y turns thus conquering said lairs ASAP is important.

Or just play as Tarth and get to ignore all these roaming monster issues (although they will still take out the occasional resource).

I do think that it is at best condescending, at worst arrogant, to suggest that people need to choose their city founding strategy better. Due to the horrible (this is opinion, not fact) design decision to use a post apocalyptic world with very few good city siting choices, you might never found a second city (or on really bad, i.e. normal, maps a first city) if avoiding monster lairs is a primary driver for city founding.