I was told by Jaspymon that it wasn't even intentional. That TNT just stopped being good for mining and nothing was really done to fix it. After searching on the forums about it, I found out that the pimps more or less set up default TNT to not do block damage to limit griefing. Further, the explosive weapons talent had increased explosive damage and block damage at one point, and now it doesn't.
To return TNT to it's mining and POI safe opening glory, these are the XML lines to modify.
<property name="Explosion.BlockDamage" value="900"/>
<property name="Explosion.EntityDamage" value="320"/>
<property name="Explosion.ParticleIndex" value="1"/>
<property name="Explosion.RadiusBlocks" value="3"/>
<property name="Explosion.RadiusEntities" value="6"/>
Those are the current default values. Increase them to increase the effectiveness of the TNT. Radius blocks will both increase the maximum range, and the start of the damage fallout, so that value may need to be increased first.