Update: Yes, a short blades focus is a lot less powerful once you get to Bethedsa Susa. I'm struggling against Cragmensch, taking lots of damage from mental attacks or the stray boulder that hits me, and had to use a lot of injectors to beat the trolls. I didn't spend too long preparing -- the Cragmensch would probably be easier to kill if I had a vibrodagger or a powerful elemental-branded weapon, or if I'd spent a while grinding for levels, skill points, grenades, and bits to make grenades; but at that point it wouldn't be the short blades that were really carrying me, anyway. Other weapons have higher penetration caps (and Vibroblades are better than Vibrodaggers, if I were using them), so the difficulty with Cragmensch is a disadvantage to daggers specifically and not just to melee combat.
More importantly, there's a bug with the cybernetics information terminal. It's adding an extra newline after every line, which pushes much of what it says out of the text box.
Also, I backed up my game to test, and no, the short blade tree is not enough to defeat Saad Amus, not without a lot more levels than this. Pity, beating him would certainly solve my mobility problems. (Granted, I didn't grab that ability that disables movement... Saad Amus lacks ranged attacks, so possibly that could shut him down while I finish him off with my Eigencannon. I'm not sure it disables charge or the Fume-Flier, though. I also gave up the dual-wield aspect of short blades to get the Eigencannon, which might be lowering my damage output a bit, but there's no way it would have been enough to just beat Saad Amus in a straight-up fight, whereas axes and swords give you a chance to disarm him. And of course even if I managed to beat him, his sword is a long blade; there's no comparably-powerful short blade that I'm aware of.)