Hey Tinman!
I curious what exactly your problem is?! So far I have had a couple of games mayself and actually never liked the combat system very much due to the clumsy way it uses "extra success" in combat but it worked quite well nevertheless, especially if I used the narrative tools of combat pacing rules.
Yet since I don't like the system I started to do some modifications that include more combat maneouvers based on narrative effect as well as some sort of wound system that allows for hit locations and aimed blows. What I have kept is the fairly large amount of Hitpoints since I wanted to allow my players to participate in a large amount of martial conflicts and slowly being drained of their health instead of beeing quickly killed in the first encounter.
Since healing is realistically slow in the game it takes a very long time to get rid of even the most minor wounds (small amount of HP) and therefore the characters are almost constantly carrying around at least minor negative modifiers. This keeps them way more efective from enganging in nonsense-combat than any delicate system of deadly criticals ever could.
And in the end combat is something for professionals. I would not expect a hobbit craftmaster to hold his own in a direct conflict with an orc or worse. So it's quite likely that the orc will be more than able to parry most of the hobbits blows while he finishes the little rat fairly quickly.
And then you have those mighty warriors from Dol Amroth...clad in plate armor with sword and shield or with a spear thrust through the throat of the enemy, up from their mighty steeds...now who is the pro in this picture? Do you really expect an orc could do anything against a full trained knight? If so...the free people of the west would never have won the war of the rings so outnumbered as they were. I think the games combat system reflects the books fairly well, so the way it's done is a matter of taste.
But this is just my humble opinion. And as I said before it's not my taste either. Which is the reason for my variations.
For example I have discarded the "success levels" and instead reworked them as "success values" where each level provides a number of points usable for acomplishing a combat maneouver with like results. You could even distrubute the points among your group members if the group leader makes a successful TN 10 Tactics roll. This allows for real epic combat situations and group-tactics.
Best regards,
Storm of the million spheres