Returning the dragon to + 12 and upgrading the demons does nothing to deal with the extreme ambush stacks. It gives too much value to city defenses stacked with large numbers of units. Development of overpowering units was always the name of the game.
What I would like to see is reducing the ambush attack to 1 hit, then allowing the unit to get a new ambush attack with each new creature he fights. That way if the enemy has a massive force of scouts with a couple assasins giving 100% ambush, you just need to add your own assasin with 72% ambush. Now your hero/devil/dragon/demon stack can destroy the massive low quality force. It would also encourage players using assasins to invest in better units since they will possibly get multiple ambush attacks.