This may apply to the AI in general when asked to sacrifice a creature, but I do not think so (most of the time it seems pretty smart with cards like Merciless Executioner).

However, the last few times I've used Diabolic Edict against the AI, the AI has always chosen very poorly in which creature to sacrifice. The screenshot shows the most recent instance in which it chooses to sacrifice its Sublime Archangel instead of its Akrasan Squire, which is by far the worst creature on his field. I don't know if there is a problem with the AI or the card itself, but this isn't the first time I've took note of it destroying a convenient monster... in fact, each time I used the card when the AI had more than one monster I was surprised at the one it chose. I just didn't think it was a bug (or a severe enough bug) until now.

I will update this ticket with other cases when/if I encounter them.