Diminishing AoE serves a purpose on AoE actions that are also included in the single target rotation. It allows them to have a potency worthy of the time/effort it takes to put them into a single target rotation, without making them overpowered when they're actually being used on groups.
However, I feel that AoE that is strictly for AoE should just be a flat potency across all targets, since it doesn't need to take single target vs AoE balance into account.