This damage cap renders several classes that have 1 hit-strong skill, like Cannoneer, Musketeer and Featherfoot, classes that are really weak and being even more rent down by a unless cap system that only make them weaker.
There is absolutely no reason to keep a system like this if not to harm people who play those classes, it should be removed. When monsters have 600kHP late game and your 1-hit skill is ineffective on them because a mechanic that is basically useless.
All this is only for PvE focus, I don’t play pvp so I don’t know if should be maintained there or not.