Pirates are still ridiculously powerful and have been for a few versions of the game now.
Just started a new game in the latest version. Got distracted in the middle of a battle and lost the bidding war for pirate raids.
My 2 capital ships (L4 + L3 it is still early in the game) easily defeat other player's fleets but when responding to the pirate raid, were annihilated in less than a minute.
I have found in past versions that jumping them into any system with pirates is tantamount to suicide as the pirates destroy them before I can turn them around and jump back out.
I have found the best and simplest tactic for the game is to simply wait at the bounty auction and make sure I win each time.
(When I lose the bids, my one and only tactic is to pull out any defending ships and wait until the pirates are finished.)
After 3 or 4 rounds of raids the target empire is devastated and I just move in.
I have won games without firing a single shot at an enemy ship.
Pirates should be a nuisance, not a super power.