Am sorry but if you think 50% dmg for ALL PARTY for X seconds isn't much then I don't know what to tell you 
50% damage for the entire party for a few seconds, pales in comparison to certain other focus abilities.
Regarding MoD vs Thousand Cuts. Sure you can use MoD often, but why would you? You need to have a target that has an amount of HP greater than what you can do with a single party member in 8 seconds in order to actually get a benefit from it. It's powerful when it matters - boss fights or very tough elites. Same with Thousand Cuts.
On Nightmare mode, I used MoD on many enemies that aren't the weak adds you get in every group.
Regarding "massive burst": whack a mole type of fights (excluding dragons due to their mechanics) are boring, if they are very repetitive (ie: every elite will take several minutes to kill) the game will get boring fast and you will most likely start to avoid fighting them unless necessary. There are dozen of combinations (non-combo) that can deal INSANE damage. Most famous being the double static cage with several small AoE's hitting a target with multiple hit boxes which literally melts (add procs like hidden blades etc). There won't be any large hits, but a multitude of small hits. End damage / result is same.
Rift Mage focus ability fires a dozen of meteors on target location. Add Hidden Blades proc (dual if you want). Add Static Cage. Add Chain Lightning / Barrage. Add Walking Bomb / Fire Mine (dot). A ton of relatively small numbers that will melt stuff in seconds. No need of Thousand Cuts / Hail of Arrows / Mark of Death etc.
The point is that those tricks are available yes. But with MoD being a normal, frequent use skill, you can basically use MoD to duplicate that insane damage every time. It's more an argument in favor of MoD having to be a focus ability rather then against it.
Hell, it's the very reason MoD is overpowered as a regular cooldown skill. You already have the tools to do enough damage. Why would you need something to completely ad utterly crush any semblance of challenge in an already easy game?
Anyway, having Cloak as a skill instead of focus will be more broken than anything else that was / is broken. Being able to vanish everyone for 12s and not break stealth while attacking and everyone gaining 50% dmg bonus IS HUGE. There are very few enemies with perception, so you will pretty much trivialize all content (not mentioning that you would have non stop full armor pen on your Assassin and 100% crits). Making it a Focus ability was the right way to do it
It's nowhere near as huge as using MoD coupled with the examples you yourself stated.
Cloak of Shadows = 50% damage increase for entire party over 9 seconds (max focus) every 3 FULL focus bars
MoD = 100% damage increase for entire party after 8 seconds every 32 seconds
Fairly easy math.