Well, the lore exists to serve gameplay, not gameplay the lore. What I originally implemented was the Lore version of the Unstoppable Nanocaust and it didn't make the game fun (I mean, it was fun to watch the AI be crushed like a ripe melon, but it wasn't a game anymore, it was a "watch the AI and humanity die" video). If you try to play with the Nanocaust right now then you'll eventually observe similar behaviour.
I think the Nanocaust should add some interesting strategic depth, but it also shouldn't completely dominate the game (though if we have a Faction Strength Modifier a la AIWC, I'll certainly make it capable of dominating the game). I think it is critical that the human player be able to defeat the default Nanocaust for "Fun Gameplay" purposes, and I think it's more interesting if the nanobots and the AI are "at war, with the outcome undecided" when the humans show up. If all you have to do is turtle until the Nanobots destroy the AI, well, that's boring.
@Oralordos: At the moment there isn't really a "Victory" or "Defeat"; the game simulation continues on after the Ark or Master Controller dies. So I don't know the answer to that. I could certainly add "Destroy the Nanocaust" to the objectives screen as a start, I suppose.