Capped AOE would be worse due to targeting problems and deathballs would become invincible. Deathballing is already so powerful, however the vulnerability to be wiped by coordinated burst is one weakness. Just theorycrafting, it would be become impossible to kill stacked groups of people because it quickly gets very complicated who is damaged by what area of effect.

Trying to target an individual in a group is already hard enough. Not being able to just damage everybody in a group with AOE would make picking out individual low health targets a necessity. Ick.