Pierce used to go 5/6 blocks max deep, unrelated to damage. If you imagine hardened hull, which has 200Hp and 50% armor, you have a max of 400 Effective HP each block. Pierce would spread out damage a little more but it doesn't matter for any bigger sized weapon system where you can easily get above 2000 damage.
However, pierce was a nice addition for beam weapons, you could cut away easily with a beam + cannon + pierce combination since damage spread out over a lot of blocks (very useful with larger beam arrays).
Now...if that is the reason why it is considered OP I have to point out that cannon + cannon + punch through is way better in terms of hull eating. Thanks to punch-through you can make monster weapons that are capable of penetrating 400 hardened hull blocks in a row (This is not a cry to balance them, they are already well balanced, it's to point out how different it is from pierce).
By leaving out pierce, the chance of beams being used as a main weapon since it was one of the few effects that worked well with them.