Paladin has enough abilities to AoE tank. The problem is that when you are in AoE situations, monsters die and more pulls come so quickly that Paladin can't keep up. Their AoE abilities are on fairly long cooldowns whereas Warrior can spam Overpower when Steel Cyclone or Whirlwind are on CD. Maybe if Phalanx had the same kind of AoE as Overpower, they'd be more even. After the last change, it seems like Warrior parries almost the same amount as Paladin blocks on monsters around their level.

But then who wants both tanks to be able to do all the same stuff?