It should rule enmity, but in FFXI right now it might as well be the only factor. Damage is the largest source of CE when really it should be mostly shifted to VE so DDs can actually shed hate by turning around.
Trying to arbitrarily assign roles to classes is the wrong way about it, because then you get surprised by things like NIN tanking. This is part of what ruined Fourth Edition D&D, really.
If SE moved all damage dealt/taken to VE and raised the VE cap, like doubled to 20k, but left healing and whatnot on CE, then you have capping CE by healing and other wankery as an option to put yourself ahead of at least half the group, then you only have to keep up about half as much damage as everybody else to stay high enough on VE to hold hate. That's the best concept for 'softening' the system without completely digging into it and dicking with every little thing that I've put together.
This also raises the 'instantly capped VE' damage value from to 5000 damage, a bit further out of reach of current WS, but puts the 'tick down' time around 2 minutes 45 seconds if the 120 per second decay isn't changed, so enmity from damage is still retained for some time. Meanwhile CE should slowly creep up for DDs, making it harder and harder for them to stay on the mob and gives actual use to enmity reduction abilities as a longer-term solution.
Simple solutions duder. Mine is a five minute change, yours is a five month snafu.
Edited, Jan 2nd 2013 5:28pm by Raelix