Let me put it another way:
A power that deals 10 fire damage is not assumed to be less powerful than a power that deals 6 fire damage and then 4 fire damage.
Fallacious.
This is your logic:
'If the rule does not work the way it does, then things are balanced around the rule being the way it isn't. Therefore, the rule cannot work the way it does.'
Here's a better way of looking at it.
Let's say you're mildly allergic to peanut oil.
Now, if you get stung by a large needle filled with peanut oil, this is going to be bad for you, once.
If you decide, on the other hand, to dive into a tank full of peanut oil, and remain in there for a longer period of time, it is going to do far more damage in the long term. Continued exposure is considerably worse than that one shot.
Shoot Superman with a kryptonite bullet, and he's inconvenienced. Toss Superman in a kryptonite gas chamber, and he's as good as dead.
That said, monsters know that 'FIRE BAD' or 'AVOID THING OF SUPERDEATHPAIN' enough even on an instinctual level to avoid being caught in such things for very long without some help from the party, so it takes a lot more effort to take advantage of than 'Cloud of Daggers = win'.