Less assumptions, more serious pondering/testing! Not working well in most RPG settings where bigger/flashier is better and not being designed as weapons don't matter in DF. Things like control and reach don't matter either, the game concerns itself with impact calculations and little else.
I doubt that anyone claiming daggers are 'essentially less effective swords/spears/whatever' has tested them thoroughly. Full steel or adamantine armour generally protect well against most iron blades including swords and spears - but dagger stabs will get through easily. Against lesser armour, daggers become less attractive: If spear stabs are good enough to penetrate they will cause bigger wounds... and daggers waste half of their attacks on slashes that will probably still bounce off.
I've been recommending picks for long enough and haven't been the only one. One look at the RAWs should keep one from dismissing them outright, testing confirms their strengths easily enough unless you pit novice miners against grandmasters because you can't set mining in the arena.
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Simulation subtleties aside, we shouldn't confuse 'serious threat to our dwarves' with 'good weapon for dwarves'. Invaders need can openers, bonus points if they dispatch naked civilians quickly. Dwarves need something that works well against humanoids in partial iron armour and beasties. Whips, scourges, morningstars and daggers can take down opponents in superior armour but don't fit dwarven needs. Disappointingly, dwarven needs are quite simple... 'picks only, mix in some axes once you have adamantine' is probably going to be more efficient than trying to be clever.