It has nothing to do with "computing power" actually.
Sure it does. If you want to play a game with 1000's of provinces and 10,000 individual units your are simply not going to get it play intelligently in a manner where it uses all of the same 'tricks' to play well. If you want it to play well and compensate for its failure of analytic ability, and indeed, and probably more importantly,
to learn what its opponent will do, through experience, then yes, you have to start fudging things if you want it to be competitive.
The kind of logical subroutines necessary to make it even come close to having that kind of ability, in a game this complex is way beyond the scope of a PC. PC's are only relatively good at chess, and that is just pure number crunching for 64 squares, and 32 pieces played in a linear way.
But you simply are not going to be able to get it to decide such things as "if I grab just one unit from Oslo here, and then use my 3 transports over here at Danzig, and do a land invasion of this Soviet province, I will likely be able to surround and destroy 6 Russian divisions" like I did the last tuesday against a
human opponent. It's just not going to have those kinds of facilities without a massive amount of computing power.
In the present configuration, having omniscience is a fundamental way that the AI decides if an attack is feasible in the land AI, because it counts the possible reinforcements that can reach a province within X number of days, as defined by, "enemy_reinf_days". Without that the AI would constantly be making useless attacks. This is also one way that one can tune the AI to be aggressive, or passive, or to take advantage of its superior doctrine, even against overwhelming odds.
As programmers we predict that Germany will have superior doctrine against the SU in 1941, and so can lower the "reinforcement days" and the minimum odds of attack to take into account this fact. Not allowing it to count units that are possible reinforcements would severely hamper the AI.
Of course there are numerous ways to do these things, but this is just one example of how "prediction" can be programmed in, in advance, and how a "cheat" can be used to make it preform better to compensate for its inability to make a real analysis, make intuitive leaps, or learn from experience.
If you don't care if it is competitive that is another thing.