Staggering and stumbling happens just as much in reflective and non-reflective cases, the only difference is who is doing the staggering. So basically you say that you hit a lot of friendlies and if the damage was reflective this would ruin your game experience. Hmmm, interesting.
if remember correctly both the hit and the hitting one staggers when reflective is on, no? could be wrong, though.
However to be honest I can't exactly remember and determine the reasons why reflective damage makes the game feel so horrible, but it does. I recently played on a native server with it, and it is just ... horrible. Maybe its only because I see people dying magically or people behave differently, dunno exactly.