In a video game anything the player doesn't see is a waste of time. In the case of games with large branching story lines it's a tradeoff between putting effort in to content which might be unseen and adding "depth." AI is the same. A genius AI that does all kinds of magic in the background is useless if the player never gets to see the magic.

Games don't want true AI solutions, they want to entertain the player. Put enough veneer on the world to make the player suspend disbelief and move on. Anything else is a waste of money for the most part.