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There are already 22 pages of off-topic discussions in this thread, and we are still far from reaching a consensus. A friend of mine, a big expert on Heroes 3, also complains that he can't find a super-race in Heroes 5 that can dominate everyone. I don't know how it is in Heroes 3. And that's a good thing – it means the game has a decent balance.
However, the demons are a bit behind. They have a difficult start and not very good stats for improving their characteristics (IMHO). If they had a 10-15% chance of increasing their knowledge, I think they would have more supporters. I won't say where the 15-20% should be directed, as that's not a topic for this thread.
IMHO, arguing about which unit from different races is stronger is pointless in any thread. The strength of a race is not determined by a single unit. And it's hard to say who would win in a battle between gargoyles and zombies if the gargoyles had a triple artifact. I think the one who gets a phoenix to help them first will win.