The modders went to hell and back again with damage values. The 255 damage-per-shot cap is perfect, so long as you treat it like it should be. The modders in /vg/ just looked at it and said "I love how I can crash my Minecraft when I insta-spawn a tower of 100,000 TNT. Oh hey I can mod a new laser into Corneroids!" Similar to Minecraft, it's like the suits of powered armor. "You take zero damage, and also it fills your hunger and air supply and also fall damage. You can sit at the bottom of the ocean being attacked by hundreds of zombies for hours!"
So disregard the 255 damage cap. Regular weapons are going up to what, 25? Let's not blow EVERYTHING out of proportion...
Also, don't worry about player's health being 100. I'm certain that player damage and block damage will get reworked. As it stands, anti-personnel guns do 20 damage, which will destroy any block. However, the player has 100 health. When AP guns get updated, and do 0-1 damage to blocks but 20 damage to players, then it'll make sense. The easiest way to tweak this, I think, would to just declare "All projectiles do 20x damage to players." and then tweak weapons to comply. Of course, ideally all weapons would get two damage ratings. "Damage to terrain" and "Damage to player" so AP guns could get 0 to terrain and 20 to player, while a mining drill could get 20 to terrain and 0 to player, and anti-frigate guns just do 25 to terrain and "instant death" to player.
I really think the top-tier items should be more about diluting than about power-housing. Like, instead of having extremely rare Redium blocks, instead make it so that Redium is used to dilute Titanium, so that 1 Titanium + 1 Redium = 20 Titanium. Or other alloying methods to "stretch out" your resources. The higher tiers of metals would turn into armor that isn't any better, but is cheaper. After all, warfare is never about who's got the biggest gun. War is about who can replace their lost guns the fastest.