First of all if bane hitting all the targets without contagion would not be overpowered, but on par with fire2. the 3 dot doesn´t only have a ramp up time but also a ramp down time. contagion simply moving the ramp down time further back leaving us with more time to use other dmg from source like miasma2 or shadowflare. the dps from bane will go down after 15 to 18 second when bio will expire. and even go further down when miasma expire. that is except we do use another ramp up and another aetherflow stack.
that mean also on a 2-4 mob pack the bane dps should be on par with fire2 as long we don´t use contagion and can spam other skills like tri-dasaster or ruin.
consider cleave as an class mechanic would mean that all dps class would have cleave skills and be capable to of more damage on small pack than aoe or single target would do in that situation.

in the end square-enix are in the end the one who decides how things will be nerf/buffed.