The WTH numbers are all based on kinetic energy. Using IBO numbers (350 grain arrow, 70-lb draw) at 400 fps (faster than current 70-lb draw bows can shoot, but within the realm of possibility, and it's what I have numbers for) generates about 120 ft-lbs of force, which is about 163 joules. That still works out to Dam 1. You need at least 506.25 joules to get Dam 2 under the damage formula (sqrt of E, divided by 15, rounded to nearest whole number). That works out to 374 foot-pounds. For a 400 grain arrow, you'd need a velocity of approximately 650 fps to get Dam 2.

All that said, I agree that the formula is probably giving Dam numbers that are too low. 65 foot-pounds is supposed to be enough to hunt even large game (as long as you have good aim), but that's going to be Dam -1 in the WTH system. I'm thinking the divisor needs to be dropped significantly for high-mass projectiles, possibly to 10 or even 5. I haven't worked through what that would do for edge cases, so it's possible that would break more than it would fix. Of course, archery should also require more selections per point of skill, because it's more difficult than using a modern firearm.