Paladin in it's current state is useless. The job deals too little damage, does not generate enmity fast enough to keep up with other jobs, and really offers nothing to groups that other, more versatile jobs can. It's a one-trick pony that's run out of steam. So, the job clearly needs to be revised. I believe I can offer the solution to the situation.
Edit 5/13: Changed permanent enlight effect given with no shield equipped to a Bravery aura and reworked how I think light-based magic should be buffed without a shield equipped. Minor additional changes throughout the post. Nerfed an idea or two cause I thought I might have gone a little overboard in hindsight (regarding how changes would interact with other changes). I hope you'll find the ideas an interesting read.
The Cure to the Common, Crappy Paladin
First off, Paladin will need to be made more versatile. To fix that, I propose these two configurations depending on choice of gear (well, shield or no shield):
Paladin: The Support/Tank
From now on Paladin will be able to offer the party not only a tank that can grab and hold hate, but one that can support the party. While wielding a shield, Paladin will gain access to a support aura that will offer 2-tick regen, refresh, and regain to all party members in the general area (Paladin included), also, allies affected by aura will be subject to a rapid enmity decay affect. Additionally, Paladin will now be able to "stagger" monsters with their shield. A staggered monster sufferers from reduced evasion, defense, and becomes more susceptible to critical hits. The effect lasts 10 seconds. There is a chance of staggering on a successful shield block. The larger the shield, the more likely it is to stagger (likelihood varies 25~50%). Shield Bashes can trigger the effect and would be considered successful shield blocks for the sake of determining if they were successful in doing so. Alongside the enmity decay given by aura and job ability adjustments below, I think it's safe to say Paladin wouldn't have much of a problem holding hate along with being able to contribute to the party's efficiency, making it a more attractive job inside parties.
Paladin: The DD/Healer
So Paladin can offer more to their party as the tank, but what if the party doesn't need a dedicated tank? Perhaps the monster is dying so fast it doesn't matter? Well here's the fix for that. Paladin will now be able to fill the roll of a decent damage dealer (not a super-amazing DD) and bring their healing skills to the front lines to boot. When not wielding a shield, Paladin will gain access to a Bravery aura, providing a 10~15% damage buff to all standard and crit hits made by the Paladin and nearby allies. Additionally, the Paladin's light-based spells will be given double-potency (Enlight included) and a +25% cure potency. Cures will provide the targets with TP (3TP for Cure, 4TP for Cure 2, 5TP for Cure 3, 6TP for Cure 4).
So that covers the major changes to the job. As for the more minor, I think a new job ability and a few changes to existing ones will pretty much wrap up all that's needed to repair the Paladin job:
New Job Ability
Battle Chanting: The Paladin's spells do not interrupt battle-related actions. Additionally, they can't be interrupted through physical means. Recast timer of spells is doubled. 90 minute duration, 5 minute recast.
Job Ability Changes
Sentinel: Ability now heavily reduces the enmity of the next highest party member on the monster's enmity list and prevents their enmity gain for 20 seconds. Damage reduction and enmity gained by Paladin still applies. Reuse lowered to 1 minute, duration will be lowered to 7 seconds. (mathematically, 6 would appear better, as you'd be reducing the recast from 5 minutes to 1, however, I feel it would better balance out with the extra activations interrupting hits more often)
Rampart: When used, the Paladin absorbs 30% of all nearby allies' enmity. Enmity is compounded onto the Paladin. This compounded enmity can go over cap, however, quickly decays down (back to standard cap within 10 seconds). Magic damage reduction now quarters magic damage taken by all party members for the short duration. Reuse lowered to 45 seconds, duration of magic shield lowered to 3 seconds.
Shield Bash: Reuse lowered to 90 seconds. Damage can crit.
Oh, and here's a couple New Job Traits
Divine Protection: Cover no longer requires the Paladin stand in front of target to redirect damage.
Smite: When an enemy's HP is under 5%, the damage dealt by Paladin's light-based magic is multiplied 4x on the target (does not stack with the 2x mod given when no shield equipped - this will replace that mod in given scenarios).
This should pretty much do it. Nothing too over-the-top, but everything needed to breath life back into the job in ways that will not only benefit the player, but also their party members.