At the start of D2:ED, I was picking my off-hand weapon more for the bonuses it had than the actual damage, since those values tended to be pretty much the same after the penalty. Even with the penalty, hitting twice is better than once (one handed and sword and shield are certainly viable options, but duel wielding is more effective, especially after you can start adding enchantments). In D2:ED there was debate about whether two handed or duel wielding was more powerful; with the changes in DKS, it seems duel wielding easily wins.