Well, Dodge is really a gameplay compromise. Players without dodge die instantly. While that would be more realistic, it simply wouldn't be very fun to play, especially for nonjedi characters. We will eventually have hitzone specific damage and Dodge levels based on your stats (where Jedi get more Dodge Points than nonjedi characters). Both should help the problem to a degree but every player will still have at least some level of Dodge.
As for your "bug", that isn't actually a bug. I had to disable idle saber to get Dodge to work good. Previously, it was possible to screw your opponent up by poking him with the saber, triggering his dodge (for 1 point of damage!) and then striking him down mid swing. I know it's not very realistic, but it wasn't realistic the old way ether. An added bonus of this change is that you can stand all posey-like when dueling. (without the sabers constantly blocking each other when you get remotely close)
---Jedi Guardian of the Newbie Questions
---Masters of the Force Team Leader / Creator
---Open Jedi Project Lead Moderator / Co-Founder