It is not as bad as in FF XI.
But yes, Paladin is in a bad spot.
As long as Warrior, in it's current state is a better Tank and a better DPS than us, in any current Content of 3.x.
Even Dark Knight is only slightly weaker agains Physical DMG than us, but therefor better in taking magical DMG...well ofc. his DPS is way higher than ours.

Paladin is meant to be:

- Best Tank
- Lowest Tank DPS

Actually we are not the best Tank (it is Warrior), but we are the Tank with the lowest DPS (Reason?!?).