I don't want to sound mean but this is a terrible idea. It would mean ALL mages would have to stand in melee range.

This would bring up the following problems:

1. Space: In a big alliance, can you imagine how much of a nightmare it would be to co-ordinate ~20 people who are all standing toe-to-toe with the mob? I mean FFXI monsters do tend to have big hit boxes, but still...

2. AoE: Most high level enemies have terrifyingly powerful AoE abilities that would simply kill any mage within melee range.

3. Design: The only mage jobs that are designed to be in melee range are BLU and RDM (although RDM is questionable). If a job is designed to be able to do damage from range, that is usually how the developers want it to be played and as such, will have low defense to enforce this as well.

Although it is an interesting idea and you could argue that the damage bonus is exactly that, a bonus, so if mage jobs wanted to remain full distance away from the enemy they can, this will never be the reality. When there is an opportunity for people to do more damage, even at the risk of dying, they tend to go for it because people like big numbers.

SE are going in the right direction with the changes to black magic they have planned. If mages want to do high burst, they cast higher tier spells but less frequently. If they want to do less burst but higher dps, they cast low tier spells more frequently.