But honestly... should it hurt MORE than the unarmed attack? Would Juggernaut have done more damage than ripping Deadpool in half if he hit him with a combat axe instead?
Should it hurt like hell when Juggernaut rips Deadpool in half? Absolutely. But when Colossus rips an axle off a ruined bus and smacks Juggernaut in the face, that should also hurt. When Hulk swings his big axe at Thor he should send him flying across the arena to smash into the wall.
A giant Strength 14 troll doing catastrophic damage with his bare hands is a good thing. But when that same troll hits you with something, it should probably also be catastrophic.
But this isn't just limited to super strong characters. Let's take an elf who goes full Agility 7 and a Reaction 5 because he wants to have a strong Initiative. He takes a Strength 3 because he doesn't want to just dump Strength so he can handle some Grappling and Wrest attempts, but it's not a focus. This character has an Attack of 8 with his bare hands and a Damage of 2S. This is on par with most melee weapons, so nothing too crazy, right?
But then let's take that character and start adding augmentations. We're talking combat characters, after all, right? We'll assume a heavily cybered street samurai concept Well, you're going to be in a lot of fighting with that katana you're planning on using and you want to be able to take a hit. Let's spring for some Bone Lacing. We'll go big since we're planning to do a lot of fighting, so let's go with Titanium. In addition to its defensive bonuses, this also turns your damage into Physical, adds +3 to your Attack rating and +2 to your damage. So now, without any further modification, we have an Attack Rating of 11 and an Unarmed Damage of 4P. Right off the bat, that's better Attack and equal damage to the katana you're going to be wielding as a high-Agility character. And since you're using Close Combat for both actions, that Agility you invested in is going to be just as useful to you for punching as it is slicing.
The only advantages the sword still has going is access to the Shank Edge Action and probably a Specialty in Blades for two extra dice if you plan to be good at that sword. So there's still some reason using a blade over punching, but they're easily on par now.
But that's just one augmentation. We're a street samurai, right? Let's add on some Wired Reflexes, or some Reaction Enhancers. Or maybe both since they can work together as long as they're both wireless. Or play it safe from the hackers and go with Synaptic Boosters for the same effect. Those are going to push your Unarmed Attack rating higher, but the katana's going to stay at 10. A little Muscle Replacement or Muscle Augmentation is also going to boost your Unarmed, but not your katana. At what point does the extra two dice to attack with and access to one Edge Action get outweighed by simple stats?
Unless you intentionally gimp your Strength/avoid Bone Lacing or other similar powers, then even the high Agility characters are going to suffer from their Unarmed being a more viable option than their weapon of choice.