DaRKSTaRxMeRC:

3. ...So IF Covenant survives till late game, they will be unstoppable. 3 Star Veterancy everything is ridiculous.

Remember, it does NOT give 3 Star Veterancy everything.  It gives 3 Star Veterancy to newly produced units only.  Which means that they will wait to have their old army die through attrition before they can start reaping the benefits.  Given that the temple shape changes when it gets leveled up, their opponents should have fair warning of when the Covenant are going to become uber.

And yes, building a Temple before building any unit production is still pretty much mandatory, albeit for different reasons.  Ensuring that the build queues for leader and non-leader Covenant remain roughly the same makes it easier to balance.

Overall, you can expect the Covenant will be 1 star early-mid game, 2 stars mid-late game, and 3 stars late-very late game.