Well, I can't speak for everyone....
But I played the coin-ops of MK and MKII extensively when they were out, and I find the AI on MKAK to be spot on. Don't get me wrong, I'm not defending everything they did with this game, I think a lot of it is utter crap. The sounds are terrible, online is worthless, and blah blah blah, I agree with all the comlaints on this game.
However, I find teh difficulty to be exactly what I remember from the arcade. I also worked at an arcade and the coin-ops had difficulty settings in the diagnostic menu. I don't remember specifically, but I don't think they made too much of a difference there either.
Speaking of the diagnostic menu, I'm wondering why they didn't include the original menu. I don't remember a lot of options (except for arcade style options, like how many credits for each token, etc.), but there definitely was a no blood option. I don't know why they removed that.
Anyway, all the tricks I remember from the coin-op are working for me on MKAK. You don't have to use Jax, you can pretty much use anybody once you figure out the timing of jump kicks and leg sweeps. The AI always falls for them if you do them the right way. Except Baraka, I remember he always did his blade fury and it was best to use Raiden and do the superman move in mid-jump (about neck level on Baraka). I always used Shang Tsung with no problems both so I could use this tactic and so I could see any fatality I wanted to. He's also got one of the better jump kicks.