I still seem to be the only person here who likes having the pirates on.

I typed up my strategy as regards pirates in this post: https://forums.sinsofasolarempire.com/386950

The strategy works for me. The pirates work for me. I don't usually fight them until near end-game, and then I do it just for the sake of having another planet or if I don't want to have to think about the pirate timer. Remember, if the sword is by someone's name, that means the pirates are still after them. 

I usually ignore the missions in diplomacy too, even when I'm allied. I try to pick someone who likes me for smacking around one of their enemies if I can, research the tech to make bribes more effective, and use that to get a good temporary boost to get a ceasefire so I can send envoys over. If you can get a ceasefire and a few envoys, it's just a matter of time from there. Pacts are sweet!

The player is heavily favored?  Umm, HOW!?  I am constantly harrassed by missions I have no way of accomplishing because the very same AIs demanding I do them bids pirates against me from the getgo (and even when they don't, the pirates target me when there is no higher bid on anyone else).

I'm sure everyone has an opinion, but the Pirates need the following alterations to make them more balanced:

First, they should be more random in whom they go after when there's no bid to target them against someone specifically.  If there is no outstanding bid, they should not continually go after the player.

Second, eliminate their bonus versus structures.  Its ridiculously imbalanced that (as just happened in my current game) 8 weapon platforms (Gauss/Beam/Missile) with 3 supporting repair platforms and 3 Hangar platforms all within supporting range of each other are not enough to handle early pirate waves.  My previous game, as Vasari, they took out a similar amount of embattlements PLUS a 2 weapon/2 defense upgraded Starbase that was also with the missile platforms, repair stations and hangar bays!  My fully defense-upgraded Terran colony died against 4 Pillagers that my Bomber squadrons were concentrating against but could not take down in time to save the colony.   Pirates should be scrappy menaces, but they're uberpowerful.  They should incur penalties versus weapon platforms, hangar bays and starbases, not bonuses!

Third, their attacks need to be spanned much farther apart, at least half again (preferrably double) their present span between waves.  Even when I do manage to take down a pirate raid with two early capital ships and a horde of embattlements, a new wave will already be on the way by the time I take out the last pirate ship.  This leaves no time to expand, take on the supposed AI opponents aside from the pirates.

Right now, I can't help but rate Diplomacy much lower than Entrenchment or vanilla Sins, as it amounts to a hard-difficulty tower defense game, even on 'normal' game difficulty setting.

Also, a bit of a tangent, but is there any good website for Sins mods?  The threads on Sins mods attempting to list them all is a couple years old and none of the forum links on the mod listings even work.

An advanced player (such as myself) does not worry about the pirates in SP at all TBH. Still, they are broken and need to be fixed not just for beginners but also so you can't just use them to take over the galaxy, something that advanced players can do quite well.

Easiest way is simply to outbid the AI early on. It won't add more money unless it's bounty is the highest.