...I was just trying to build a 3.5e ranger the other day:
What about a halfling ranger-archer mounted on a war dog companion? Wha'd'y'all think? Dumb? Brilliant?
As for the difference in damage: Hey, we can look at that.
(both rangers with Long Composite Mighy Bows, we'll say the human has a 50% chance to hit whatever AC it is, one attack per round)
Human: Str 14, Dex 14 => 3.4 hp damage/round
Halfling: Str 12, Dex 16 => 2.8 hp damage/round
Keep in mind the other halfling bonuses, including that +1 AC bonus and +1 save bonus..... That might "offset" the one half a point of damage difference.
That's right: There's little more than Half a Point of damage difference between these two.
The point is: Although the human does more damage per arrow, the halfling will hit 10% (+2) more often than the human.
So, if the chance to hit is lowered......lets say they both do "rapid shot", then the difference gets much less:
Human: Str 14, Dex 14 => 2.5 hp damage per round
Halfling: Str 12, Dex 16 => 2.4 hp damage per round
Now, if the chance to hit is sunstantially less to hit, the halfling wins.
**Additional point: If the character has some additional dice of damage that's not affected by size, like sneak attack or energy damage, then the halfling wins, hands down.....errr, bows up!