The game does get tough at certain stages - especially when you get a new Tier ship. A fully upgraded T3 ship is much better than a new T3 ship - and the grind to get to those upgrades can be rough.
I don't know if I agree with the whole grind bit - is it really necessary? But then, I guess it gives players an incentive to play? I'm sure there's psychology that plays a big role in all this - much like it does in most RPGs. Then again, I've upgraded most of my t4 ships, and if the eternal level up is the reason why people play, you'd think that I'd lose interest, yet I still enjoy playing - as it's becoming more like a game of chess (where certain modules counter enemy modules and certain ships counter enemy ships more effectively - so it all then becomes about strategy and figuring out the best fit for your ships).
Indeed, it's this chess-like mechanic that you get to play with when you have 4 or 5 fully upgraded T4 ships is where the game really shines. I'm certain that many people quit because they never get to experience it due to the eternal grind.
The eternal grind is also the reason why T5 battles are nearly non-existent.
There was a time when this game had a 'bug' - ships were awarded credits and points of the ships ranked below you - you'd usually get 5K credits per each game if you were the top player. That made the grind seem less significant - then they 'fixed' that and the grind was back in it's full glory. Little did the developers know that the 'bug' was actually a feature - and they removed it.
Perhaps one day they'll wake up and change the system?
We shall see.