Yeah, d4s are going to be exploding more often than anything else...which in the case of daggers and the like might make sense, actually; one of their advantages is they're more precise than larger weapons.Sounds cool. I'm sure the dagger-wielders will love it, and casters will hate it.
You could switch from 1d20 to 3d6 or somesuch, and have those dice explode, and then have some system for how the margin of success affects damage.
I love scaling dice, but it would be a hard sell in D&D. That said, it already exists for things like longsword damage, so...?