Yeah. Unfortunately, balance was one of the things I was forced to cut due to time constraints. When you get thousands of units, the game actually becomes close to unwinnable (as the goal is to eventually let a hero through). The heroes definitely need some form of AOE attacks, otherwise throngs of spiders just eat them up. On the flip side, if you mash spacebar real fast, a swarm of lvl 1 heroes will easily go through pretty much anything.
The idea is to build up the dungeon to weed out unworthy heroes and eventually lure a worthy challenger to challenge you at the bottom, but it's going to take a bit more effort to make that work.
What it really needs is more focus on the loot dropped from heroes. A way to redistribute it to the lower levels so the next hero doesn't just snatch it up.