Well, but you are judging arguably a very complex and deep game by a single session.
Take poker, for example. It's a luck dependent game for sure, because cards are drawn at random. No poker player can guarantee he will be able to win a particular round - or even a game. But in the long term, the tournaments are won by the same people, because even if luck plays its role, the good players know how much they can bet on their card, and have better calculation, intuition and psychology. So even in luck based game, skill wins in the end (it does not apply to all games, though, some are really totally luck based). Same goes for backgammon - the good players know when to double the odds, and even if they don't win more often, they win more points. In the long run, the lucky streaks cancel themselves out.
On the other hand, take chess (I am a passionate and long-time chess player). Chess is completely deterministic and open game - no hidden cards, no luck. Despite that, you can lose a game in as few as ten moves, just look at some famous miniatures. It's very rare on the master level, of course, but it happens regularly even to some club old-timers - and for reasons not always obvious to them. Sometimes you put a piece on a wrong square, sometimes you take a really poisoned pawn, sometimes you create a weak square that paralyses your whole position.
Deep games have often layered levels of skill, and if you go deeper and deeper (and it always takes time and many losses), you discover important nuances about things you took for granted. That's what makes them beautiful and rewarding. And though I am no Dominions expert (because the core of the game is supposed to be magic, and it did not even enter the play yet), I feel that there is much depth to be found here.
That is not to say I was not lucky in this game (and it's not in any means over yet), but luck had arguable had its say in real life historical battles too - that's just the way warfare goes.
Concerning our game - yes, you were very unlucky, but you also took risks. You knew where I was, you saw my troops in battle so you could estimate that it would be difficult to beat them head on. I don't know what moves you took, but if you rushed to take Wynna sooner, and fortified it with reasonable PD, I would be probably hesitant to enter it, and we would have to come out to some kind of agreement. But you bet everything on one card and sent both your prophet and pretender - thats equivalent to All-in in poker. Yes, the battle was crucial, and you were unlucky to fight the independents first, but I still think I could kill both them and you afterwards anyway (with more losses).
But even after that happened you were unreasonable with your demands - I was really ready to let you live as a sort of vassal state, taking Wynna and Mark and letting you to expand southward. Of course I would never really let you grow enough to endanger me, but such is the nature of this game. There can be only one victor in the end, so everyone is bound to become your enemy sooner or later. Many real-life nations had to make such decisions - to bow down after lost battle and accept servitude to survive. Many of them survived and lived to the day their overlords fell to a more powerful enemy - and sometimes they even got to stab him in the back. Some chose to stand and fight to the end, and were utterly destroyed.