The laws of physics tell us that, since the force of gravity is 2.8 m/s squared, that once an object has been falling for a certain distance, it no longer increases in speed, therfore it would not increase in damage. Also, physics has shown that to similarly shaped objects can be dropped from the same distance, and land at the same time, therfore the weight makes now difference to how hard an object hits once it lands.(object in point, dropping a penny off of the CN tower)This is probably why the creators of the game set the fall damage as they did.
But I do like the idea of splash damage, especially since the picture in my head is flying bits of broken armour, burning bones, etc....
ps- if anyone reading this would like to test that out, take a grape, and an orange, and drop the from the same height.