Agreed, 20 percent is not nearly enough for what it gives you. Remember, not only are you receiving an indestructible battleship, but also the aid of several minor factions' ships. Personally I think that these bonuses are at least worth a 50% AI difficulty increase, if not more.
Sorry, but I think this is crazy.
A single Champion is a 20% addition to the multiplier of the AI's strength for everything. Forever. Start game, middle game, end game. Each wave is 20% stronger. Every CPA is 20% stronger. Every Exowave is 20% stronger.
For comparison, a single Champion is like moving instantly from 7.0 difficulty to 7.6. 5 Champions, which is a 100% bonus to all AI strength calculations, is like moving from diff 7.0 to 9.0. Or it's like having 4 starting HW - but without the extra resources, bonus ship types, or larger caps.
While Champions are impressive, and a lot of fun, by the endgame, they are a distinct drawback in the long run. In my current 9/9, 8 Champion game (+160% - a 2.6 multipler to the AI's everything), all AI waves are in the 10,000 to 15,000 size range instead of the 4,000-6,000 size. 8 Champions are powerful, but even they get crushed by 6,000 or 9,000 ships. I've been forced to spend almost all my K on defensive options (Fortresses, turret upgrades, FFs) just so I can survive.