I just leveled a Paladin to 120 playing Median XL XVI version. Here are my findings in regards to Holy Paladin vs Unholy Paladin.
- The Holy Melee tree relies on Solar Flare/Incarnation too much to be viable. And the Holy Melee Set (Cinadide's) doesn't allow you to cast Solar Flare once you have two pieces. That's a big problem because the Life Steal, AR and Bonus Elemental Damage from Incarnation make Retaliate great. Without that, you gotta put points into DEX for extra AR. That's counter-productive and should be fixed or addressed in the upcoming patch (Sigma?)
- I also agree that plague is quite weak. The damage is spread over 9.6 Seconds so the DPS is quite low. If you need poison, Symphony of Destruction does about ten times more in a shorter time. As a suggestion, Plague should also scale with STR as a Synergy Bonus.
- Holy Melee hasn't got any Life Regeneration except Vindicate (Innate) and Solar Flare if you have Incarnation. You are stuck with potions/apples. More space consumption in Invo
- Retaliate scales with hard points into STR. This makes the Dragonknight stat buff mostly useful for STR unless your gear has insane amounts of +Attributes or you invested evenly into other stats.
- Superbeast increases Spell Damage and also attacks/casts faster than Dragonknight.
- Tainted Blood with Terror Strike offers more protection than Dragonheart which caps out at 1000% defense and doesn't regenerate life. Tainted Blood can be cast on your Mercs/Minions and Dragonheart can't.
- Stormlord provides more stat bonuses than Dragonknight for the majority of the leveling portion of the game and allows you to put hard points into other stats like Eng for Spell Synergy. Holy doesn't have that luxury. Let me explain.
With a Current Skill Level of 10, Stormlord provides 90 points to all attributes.
With a Current Skill Level of 10, Dragonknight provides 20% Boost to attributes.
For Dragonknight to provide the same effect of 90 points of attributes, you would need to have base stats of 450 Str, 450 Dex, 450 Eng, and 450 Vit. Then the Dragonknight buff would give you 90 to all Attributes. Consider the fact that you can only use 500 Signets of Learning per Character. 90% of the time you play Median XL, Stormlord will provide more stat bonus than Dragonknight. The odd 10% of the time is based on gear with +attributes (late game SU's/RW's). Eventually Dragonknight will provide more in the later stages of the game because it offers a percentage rather than straight points. Until then, Stormlord wins most of the time because it isn't an Uber and can be used alongside Superbeast or Resurrect.
- Holy Melee does have the advantage of benefiting from on striking modifiers with Retaliate/Hammerstrike hitting multiple targets. This can be really useful depending on what gear you pick up.
To conclude, I think the Holy Melee isn't quite there yet. Based on my experience playing on P8 thus far, the Unholy Paladin has more Stats, Life, Defense, and Damage (Physical and Elemental). I have a significantly easier time as an Unholy when I run Ubers rather than a Holy. I haven't tested all the SU's yet I am still grinding it

I noticed some SU's still have the Searing Glow Dazzle Duration on Paladin based items. Not sure what the use of that is anymore. I hope this feedback helps to improve this amazing mod. Thanks for reading.