Allthough I like the work you put into this, I am afraid I have to say your calculations are quite off.
The most important thing you forgot is that the damage of a weapon is not decided by just the edge modifier.
Weapons (or rather attack types) have 3 damage types:
Point = Pierce
Edge = Slashing
Blunt = blunt
Armour types (or rather armour materials) have the same 3 absorbtion types.
So the effective damage a weapon does depends on the type of damage it inflicts for the type of attack used, against that absorbtion type of the enemies armour.
Taking all that into account, the balance of weapons comes out quite differently.
Late game most enemies will be using metal armour or mant chitin which is weak against blunt, hence why most veteran players equip most of their gnomes with hammers, since hammers are the best weapon against those armours.