Please, please, please make different damage types effective against different types of armors. Right now if you really want to game the system, you're better off only using a pierce weapon.
To be honest, that's how I thought it worked when I first starting reading into the game, putting pieces of what people were telling me to help, just using intuition and imagination. I think the way it was supposed to be balanced was the sheer damage on cut weapons. As it stands though, you only get that on the axes, like the (mundane) persian battle axe is 45c or something silly - the drawback being short, slow, and unbalanced. Swords give you the speed, length, and balance they're supposed to. Piercing weapons usually just have less damage, and blunt weapons even less.
I would say its balanced for these reasons, but the damage cutoff is really drastic. It wasn't until I saw the graph (which is probably highly outdated) on the cRPG calculator page that I really understood how severe the cut damage dropoff was, even on low-middle weight armor:
My buddy uses a MW Highland Claymore, and an 8 PS build, and it takes him half a dozen decent hits on heavy armor. The average armor rating is a lot higher than ever probably. You have a cool idea, we'll see what the devs think. To play devil's advocate though, swords are awesome weapons. You're paying for great length, speed, and balance, and a sword will still do enough damage to get the job done. High-pierce weapons are either tactical and limited, like a support polearm, or incredibly short, in the case of a morningstar or steel pick. I guess the logic is, if it'll murder a dude in full plate, it'll murder a dude in cloth even easier. Its hard to argue with that logic, haha