I dunno about you guys, but Red Mage has never been "Good" at doing melee damage in any Final Fantasy. Even in 1, unless you gave them Excalibur, they fall way behind. Even with Excalibur, they aren't going to compare to the Black Belt. Not even a blip on the radar there.
The job has, and always will be, simply a meeting point between White and Black magic, with restrictions on both sides of the fence so that they aren't more powerful than the two specialist jobs they take their magic from.
The only reason why meleeing was an option for the job in previous incarnations, is because in all the other games, meleeing doesn't force a mobs abilities.
FFXI's design meets the original design pretty well. All RDM teams in FF1 worked not because of their melee damage, but the ability to use both white and black spells. Seriously, battle times are much, much, MUCH longer doing Red Mage x4 in FF1 than say, Fighter x4. Or even standard party set ups. They just aren't reliant on items as much, since they can use Cure spells and sleep.
That one Red Wizard you gave Excalibur to will do leaps and bounds better than the other three. Ofcourse, if you have a group of RDMs in 11 and have one with Excalibur, he's going to do leaps and bounds better as well because of that wicked additional effect.