Melee is NOT underpowered. I would even go as far as to say it is slightly overpowered compared to magic. The simple fact is, that magic users have nothing in terms of actual 'DPT' (I suppose the best way to reshape DPS into a turnbased alternative :D). Mages can burst, buff, debuff and manipulate but they are hardly ever enough to single-handedly tear down a big HP pool - after a couple of turns their cooldowns are in the way and all you do is fire off overly costly single shots.
Melee is extremely powerful starting from level 1, gets ridiculous at level 7 and stays that way until cap. Man-At-Arms is one of the most useful skill lines in the game. So lets compare Man-At-Arms with your average magic user.
Early on melee has a huge slew of problems, and later on it can get huge resists so it starts healing from stuff. Mages however just kind of wreck things with some cooldown problems here and there early, and late have so many offensive spells and such low cooldowns that it's never a problem.
Battering Ram is garbage as an AoE knockdown, as it only works about 1/5 of the time (so you usually only knockdown one person hit) and only lasts for 1 turn. Boulder Smash is far superior for AoE knockdown, and
it's a low level skill, that leaves poison for a massive damage fire combo that's better than bully and doesn't even require the talent.Cure Wounds is the worst heal early. Because cure wounds scales better than hydrosophist heals it becomes worth its higher AP cost, but still isn't better because of its limited range and massive cooldown.
Bully only works on a handful of disables and because of the massive damage scaling compared to enemy survivability scaling it's only helpful in the early levels.
Whirlwind, Flurry, and Rage are all amazing skills. Flurry mostly because it has an AP cost that seems balanced for onehanders that isn't changed on twohanders. You only ever get one whirlwind in the entire game though, so only one of your melees will ever have it.
Of course oath of desecration gives the same bonus as rage without the drawbacks...
but you can stack them.However if enemy survivability scaled well enough for man-at-arms guys to not burst them down then mages would still be better later. Early on regular attacks with no cooldown are good, but they're garbage when the mage spells have 1-3 turn cooldowns. Man-at-Arms skills are only good later because their damage scales through the roof.