I know I've mentioned this before but Pirates should be a separate AI player and should have a toggle-able difficulty setting with the lowest being "Inactive" and a few more on top of that. Personally, I would like pirates to start out somewhat annoying (a step down from where they are now, even though they are manageable) as opposed to becoming giant fleets of intermittent death when leveled up.
However, some people like unreasonable corsair hordes so they should be able to have their cake too.
I know this would be a big change, but perhaps if the pirates split up and attacked everyone with bounty (proportionally based on the bounty each player has) at the same time, that would take the cheese out of being the last person to bid b/c you weren't babysitting the auction.
TEC Rebels would still have an advantage in a 1v1, though. If pirates were not considered "neutral" but a distinct "player", then "Honor Amongst Rogues" or whatever could be moved up in the tech tree and apply only to pirates. A new tech like "Colonial Friendship" or something could remain at tier 3(?) and apply only to militia.
Another option would be to throw in the target's credit income into the calculation so the pirates send fewer ships to attack a poor person.
I'm just throwing out ideas that might make the pirate idea more appealing to a broader base of people.