I don't know what's the current state of the svn, so I will refer to the 0AD a23b state.
It's always pleasing to see people who don't do random things!
Indeed it would be more realistic to distribute the effect. What the code do is slightly different.
EDIT: I didn't see it like that, but that's the same I guess.
There is a multiplier of the damage with a quadratic falloff in the distance from the impact.
Looking from above, the damage multiplier reduction looks like that:
Again, those numbers are mainly for emergent behavior, not for direct gameplay control.
For example:
Damage multiplier in function of the distance between the impact and the target (in blue for radius=10, in red for radius=7). I plotted the left side because it's nicer:
It's also surprising to see attempts of fine tuning such a number whereas there are many broken things in the splash feature code. @ValihrAnt is doing nice though (and he makes awesome videos)!