You have to think that in a duel, whoever is in control can stack a lot of health and armor. Without this much damage with the nex, I think this would make things even LESS balanced because that leaves pretty much only one weapon (RL) to use to make a lot of damage. I've said before that against perfect weapon balance but IMO this would make things WAY too unbalanced.
The only way I could see this work would be to fix max hp and armor to 200 and had different armors that cant add up like in other games, but I wouldn't want that either, it would change nexuiz too much.
So, IMO Nex should not be changed.