Are you guys talking about pressed column dancing? Or simply engage/retreat dancing? Pressed column dancing is basically an exploit, and it is agreed that it shouldn't be used. People don't do that so much from what I remember. You could always ban people who do that.
Engage/retreat dancing is perfectly legit, though. You just have to deal with it.. although calling it the 'dominant skill' is an exaggeration, isn't it? It takes micro-managing to do that, and that means your attention isn't being focused elsewhere, like on building new cities.
Perhaps you ran into some people who were just really good at the game.
The main thing Kohan has going for it over Dominions is the 30 min - 1 hour game length, imo. I love Dominions, but if you could finish a game of it in an hour, I would never ever stop playing, ever!
Kohan is amazing for the amount of strategy that is packed into that 30 min of gaming. Other RTS games can't hold a candle to it. It's really too bad the sequal was as bad as it was.