I like the idea that a boon (or trait or skill) can scale differently based on different stats, that's cool. But it's only lackluster in PvP right now; in WvW it's fairly balanced for the situation in which the attacker is striking multiple foes. If retaliation were rebalanced around 1v1s, then it's quite possible that any AoE attack on a pack of enemies with retaliation would feel like you used ice bow 4 (aka instant suicide).
I'd be fine with keeping the damage where it's at right now, and even keeping it's power scaling exactly where it's at right now. Hell, you might have to lower both to make up for it also being a defensive boon and therefore serving two purposes. I was just thinking that Retaliation was nerfed and left as a crappy boon. Let's add something to it that isn't just more damage.