Yeah, it's scaled just like the arcades. Believe it or not, Mortal Kombat used to be a tough game to beat, until you actually learned the tricks of the AI.
I think UMK3 was the last one that actually presented a real challenge to beat. When they got away from true bosses and started making them playable in the story arc, they had to be balanced with the other characters. This made for easy boss fights, like Shinnok, and the Tsung-Chi combo.
Just buckle down and study what the computer does. A lot of the older games was baiting the computer into an attack, countering it, then putting together some juggle combo to win.
Good luck!