A Dex-based melee character has three options:
- A 2-hander (1d8 damage)
- Sword and board (1d6 damage, +1 AC)
- Two weapon fighting (1d6 damage, doubled and halved)
The advantages of two weapon fighting are:
- Consistency: your damage output is more predictable, you rarely have to deal with the frustration of missing entirely.
- Ability to kill two mooks or heavily damaged creatures with a single regular attack.
- Doubling your chances of getting at least one hit, so that you can apply a condition, all but guarantee sneak attack damage (or at least half sneak attack damage), etc.
- Flexibility: you can still attack with just one of your weapons if you like, perhaps if you think full damage will kill the target but half damage won't.
So the advantages are pretty niche, but I'd say that collectively they are a reasonable alternative to an across the board +1 damage or +1 AC. In fact, I think this is an elegant solution for two-weapon fighting: halving all damage nips most abuses and overpowered combos in the bud, and there's no annoying massive penalty to hit with your off-hand or anything.
The problem, of course, is that using a two-hander or sword and board works for anyone,
while two-weapon fighting costs you a feat. It shouldn't. There are two problems here. First, two-weapon fighting is balanced against the other options just fine by default, so making you take a feat for it gimps it. Second, you shouldn't have to use up your entire specialty on two-weapon fighting just to do it at all.
So the solution is easy: make this how two-weapon fighting works by default. Then make the first feat in the specialty something else: a one round bleed effect on a hit with both weapons, or something. Voila, two-weapon fighting looks good.