Of course its not fair. You shouldn't be able to beat such opponents. The only way you could keep up is if you were using exploits to make up the difference.
There's not fair....and then there is unfair:)
This is a common issue in 4x games, most AI handicaps are placed right at the beginning of the game, giving the high level AI an insane start. The human players job is to utilize superior play to ramp up and overcome that start.
The issue comes in, when the hill climbs so quickly, that the human player simply does not have the time to invoke that superior play. While the human can do optimizations that the AI is not good at, it still takes some time for the benefits of those optimizations to kick in. If the hill is too steep...then it doesn't matter how good the human is...they will eventually get steam rolled.
This has been my experience with godlike myself. When I play it, generally all of the planets around me are very quickly taken, leading to an incredible uphill battle. Now that is certainly a challenge, but its also not even the same game anymore, its a completely different experience (another example would be in Civ where the AIs snipe all the wonders, because you just simply cannot match their production in the early game).
The answer to this is a more progressive bonus system. Instead of the godlike AI getting 100% of its crazy bonuses on turn 1, maybe it gets 25% on Turn 1.....50% on Turn 20....75% on turn 40, 100% on turn 60....that kind of thing. This gives the player just a little breathing room to get their affairs in order before death comes.
What I have done to simulate that is, I start the game on one difficulty lower, and then after 30ish turns I change it to godlike. This seems to help some, the AIs start isn't nearly as crazy. Its not an elegant solution, but its a quick fix.