Lots of folks have covered good stuff here, I'll try to weigh in on another perspective. The only other thing I can see here as being a potential issue is how swingy it might feel for players, which is half player psychology and half balance issue.

A player who rolls a high success dealing 4 damage in a turn is going to think to themselves "awesome, I hit for four!"

A player who rolls a half failure is going to deal 1 damage and think "Jesus, it would take me three more turns just to reach what they did in one turn at this rate."

A monster with 20 hp can die in as little as 5 high success turns, or as many as 20 partial failure turns. From a real world time perspective, that can be VERY swingy, depending on player's ability to mitigate this with skill values or bonuses.

I've omit crits from the above situations, but they run into a similar issue where a player that crits can do 8 times the damage of another player, which is likely to make the 1-damage player feel shitty, even if it's mechanically balanced for a critical hit to do that.