And I churn out another stupid-long post. I think I need an intervention or something 8)
Let me give an example of 2 20th level Nomads who both wearing a DR 10 Armour. All else is the same.
To hit the Nomads gets a +20. To defend the Nomads get a +10 (total DV 20). So using Str, to hit the Nomad needs to get a 0 or better. However, the Nomad will get a -10 or possibly a -5 to damage.
Dear god no. For starters you are comparing a full BAB attacker against a medium Defense defender, so of course you are going to have more hits that way. Secondly you are simply counting class defense bonus and nothing else, anybody who relies only on his class bonus (espically at higher levels) is going to be meat. Sooner or later everyone has to try to boost their DV by means outside of their class bonus. We were supposed to be talking about a theoretical "balanced" encounter. An encounter where your first hit has a 95% chance of success is not what I consider balanced by any means.
Lets take a counter example. Two soldiers fighting each other (full BAB vs full DV). Right off the bat that is BAB 20 vs DV 25 (80% to hit). Now for the sake of argument I'll assume that the attacker's stat bonus to hit balances the defender's stat bonus to DV so that is a wash. But we can give the defender a large shield for DV 29 (60% to hit). And at upper levels its not unreasonable to expect a defender to put some extra thought into his defense so maybe he fights defensievly and that brings his DV to 31 (50% to hit). Of course the defender could easily have other bonuses, the parry feat or combat expertise, but the attacker could also have greater weapon focus or a superior weapon so I'll just handwave all that away and assume it mostly balances each other.
And that is for level 20, where the disparity between BAB and DV is at its greatest. At level 15 it is BAB 15 vs DV 21 (75%) without shield and DV 25 (55%) with. At level 10 it is BAB 10 vs DV 17 (70%) without shield and DV 21 (50%) with. At level 5 its BAB 5 and DV 13 (65%) without shield and DV 17 (45%) with. And at level 3 it is BAB3 vs DV 12 (60%) without shield and DV 16 (40%) with.
Now that is more what I consider a balanced encounter. A full BAB type should expect a 40%-60% chance of success on his first itterative attack. Now when working with those expectations it is easy to see that if the opponent has heavy armor, say DR 10 for making the math easy, then a finesse fighter who has a 70% chance of success on his highest attack only has a 20% chance of bypassing that armor. Which makes your equation look more like:
(Average Damage - 10) * .5 + (Average Damage) * .2
And since average damage for most finesse fighters is going to usually be <10 that means your expected average damage per round is
Average Damage * 0.2
Which is why I say a finesse fighter facing an opponent in heavy armor is totally screwed. Oh yeah, he can forget about his itterative attacks as well. Even on a nat 20 critical a finesse fighter still has to beat DV + DR to bypass armor and 20% - 25% = screwed.
Lets switch gears for a moment here.
Lets say that you don't agree with me that a balanced encounter means a 40%-60% chance of success. Lets say that you want to stick with your Nomad example. I can still prove to you that even if finesse is as effective as you think it is that it still isn't more effective than Str fighting.
Again, we are talking about heavy armor here so lets go with DR 10 (makes the numbers much easier). A finesse fighter who faces off against DR 10 and doesn't bypass it will almost certainly have his damage reduced to 0. IOW against heavy armor failing to bypass is equivalent to a miss. So a finesse fighter facing DR 10 just had his chance to hit and do damage reduced by 50%
no matter what you think his origional odds should have been (95%, 60% whatever).
Now, a Str fighter facing the same DR 10 who is capable of penetrating that armor is instead facing DR 5. If he is using a two handed weapon he can PA for 2 and get an extra 4 damage which effectievly reduces the opponents DR to 1 and only costs the Str fighter a 10%
chance to miss.
If he is weilding a one handed weapon that can penetrate (which probably means he is using a warhammer) then he can PA for 5 which is equivalent to the finesse fighter bypassing armor and it only costs him a 25%
chance to miss.
If he is wielding a two handed weapon but cannot penetrate DR 10 then he can PA for 5, again this is equivalent to the finesse fighter bypassing armor, and it only costs him 25%
chance to miss.
Lastly, if he is wielding a one handed weapon and cannot penetrate then he can PA for 10 (bypassing the armor) and it costs him the same 50%
chance to miss that the finesse fighter is facing.
So in the worst case a Str fighter is no worse off than a finesse fighter. In most cases he is better off. And since we can reasonably expect a Str fighter to have a higher Str bonus to damage and use a weapon with a larger damage die (higher average damage) it is entierly possible that he can easily eat his opponent's DR and still do damage. Heck, he could even decline to PA at all and instead put everything in expertise and spring attack in and out hopping to eventually wear his opponent out with nicks and cuts, that is an option the finesse fighter does not have and options are power.
Heck, even using your Nomad example I would simply look at it and say that anybody who has a BAB of 20 and is facing a DV 20 is a moron if he doesn't put between 8 and 12 points into PA. Now he doesn't just have a 50% to hit he has a 50% chance to provoke a massive damage save.
The finesse fighter can't do that, not because you can't use finesse and PA at the same time (you can), but because if he does then he drops his odds of hitting to about 50% which drops his odds of bypassing to 0%. Meaning he is back to (Average Damage + 20PA -10Dr) * .5 which will still hurt but most likely won't provoke a massive damage save. Most finesse fighters are completly incapable of provoking massive damage unless they are also sneak attackers (but that is a whole different breakdown right there).
Of course this is all based on fighting opponents in heavy armor. Against light or medium-light armor a finesse fighter's prospects look much better. He only suffers a 20% or 30% penalty on bypassing and even if he doesn't bypass he still might get a few points of damage through. However there is a good chance too that a Str fighter will be penetrating armor, which means that he will only take a -2 or -3 penalty to damage. So a finesse fighter facing light or medium-light armor is up by 2 or 3 points of damage vs a Str fighter. Which is probably the difference between the average damage of the finesse fighter and the Str fighter (highter Str, bigger damage die)
Which is why I say
-against opponents in no armor it doesn't matter, they die fast
-against opponents in light or medium-light armor finesse and Str are about equal. This IMO is what finesse fighting is meant for, to allow swashbucklers to keep up with jugernauts against medium-soft targets.
-against opponents in heavy armor Str is much better than finesse. At worst the two are on even footing again.