I hate reducing damage in combos. Long combos are fine, short combos are fine, whatever. But don't reduce the amount of damage for an entire combo ever, because it's stupid and makes no sense. If you are even considering that, just remove that combo from the game entirely. I don't combo to rack up numbers on the screen. I don't care if I do 2 hits or 25 hits. I'm just in it for damage. So keeping a combo in the game but artificially reducing the damage of the moves is, to me, extremely irritating and unintuitive. It makes me not want to combo. And that's my rant.
In the end, I'm still loving SF IV. Despite my many complaints (the big, nitpicky one being that it doesn't play like SFA3, which is still my favorite in the series), I think the game is really very good.