I double checked to see if it wasn't in humor section.
Anyway.
It may be possible to lose to the AI1, 2, and 3, but most of the time you shouldn't, even un-upgraded. The reward does not need to be increased. AI3 is easily beaten with upgraded decks, let alone 1 and 2. Plus, 1 and 2 are not meant to be farmed, so you obviously won't get upgraded cards by fighting them unless you play a lot. 3, on the other hand, can make you gain enough money to get the upgraded cards. As long as you know how you're playing.
All your post seems pretty confusing and contradicting to me, so I'm still wondering if this was misplaced...