Dwarves suck if your formations and tactics don't favor them. I would ask how are you normally using them first. Grudge throwers are a must, LL units should always be in your front line holding, gunners and archers should be supporting, and heavily armored units should be attacking, holding, or flanking. Further, slayers are an absolute must as they are one of the few anti large units that truly wreck monsters and such with ease. Their biggest challenge is atrocious speed. But when calvary charges, there should be units spread out that can flank them quickly while they are occupied.

Play on normal battle difficulty and all will work as it should.