It's not the DM or the Paladin that's screwing up, here. It's the striker.
A striker is not supposed to stick around and trade damage, he's supposed to move in, do big damage at the ideal moment, then back off and let someone else do the grinding.
It should go more like this: Paladin issues his Divine Challenge, he and the monster trade blows for a round or two until they've both hit eachother. The monster now has a vested interest in finishing off the Paladin, because if he doesn't, the damage he's done to the pally, and all his actions up to this point have been 'wasted.'
/Then/ the striker moves into a flanking position and does nasty damage to the monster. The monster faces a decision: change targets to grind down the big-damage guy, and take damage from the Pally's divine challenge, as well as throwing away the damage he's done to the paladin, or grind down the paladin to elemintate tha flank. Turning on the Striker is probably still a good call. The monster and striker trade damage for, maybe, another round, until the striker takes some.
Then the striker disengages. The monster now has the choice of 1) 'chase' the damage he's done to the striker and possibly take more big striker damage in return, plus divine challenge and maybe even an OA from the pally, or 2) get back to the paladin, 'wasting' the damage on the striker. Depending on the striker involved and the level of play, chasing the striker might barely be an option at all, he could have reached cover/concealment and be stealthing away (or back to do more damage when you least expect it). What's a poor monster to do?
Probably, he turns back to the paladin. They trade damage some more, and soon both are past bloodied. Just then, the striker comes back and lands some more damage on the monster. Plus, lo and behold, the striker has been healed by the party leader. Now, the monster at this point knows he's screwed. He's nearing death, facing a fresh, big-damage striker that fighting back against takes a penalty /and/ kills him faster, and a Paladin not quite as near death as him, that's also pretty hard to hit. If he runs, they both OA him, if he withdraws carefully, they just both catch up to him, if he stands and fights the striker, he dies, probably, before he can even bloody the guy, if he stands and fights the paladin, he might die before he even hits him again - or he might get lucky and drop him. If the monster is cowdarly, it runs and gets cut down in persuit, if it's vicious, it probably tries to drop the paladin. Even if he does, the paladin has tons of healing surges to get healed back up after the fight, and has done his job as a defender. If the monster still goes after the striker at this point, it really would be a DM problem. Sure, the striker's healing surges are a scarcer commodity and wounding him is probably worse for the party than dropping the pally - but what vicious monster is going to think that way.