My experience is that if I'm playing my White Mage effectively in leveling dungeons, DPsing and healing when necessary, and there's a Paladin in the group... yeah, I'm just gonna go ahead and be the tank as well. Paladins just don't have the tools to keep aggro and leveling instances (pre 36 or so) don't seem particularly punishing, so I can heal-tank just fine.

I'm still working my way through this game and have no end game experience... but from a leveling dungeon PoV, Paladins do need a bit of love, I think. Even the best played Paladins are lame compared to Warriors/Dark Knights in almost anything pre-50.