Okay, Lemmy, I've read through your system, and I have a few suggestions to make. Use them as you will.
Foreward: Several of these changes interlock with each other, so please at least skim all 5 of them to understand how each one would affect the whole idea.
1) Redo the damage die table, and unify it for Light, 1h, and 2h. After rummaging through the Bestiary, Core Rulebook, and looking at dice averages, here's my suggestion for all weapons/attacks of all sizes, with notes as to the maximum damage of weapons for a Medium-sized character:
N/A (Attack deals no damage)
0 (No weapon damage, only other damage)
1d4 (Simple Light)
1d6 (Simple 1h and Martial Light)
1d8 (Martial 1h and Exotic Light)
1d10 (Simple 2h and Exotic 1h)
1d12 (Martial 2h)
2d8 (Exotic 2h)
So a Colossal 2h Exotic weapon maxes out at 10d6 for weapon damage.
2) Make only one 0-CP be a freebie, then 1 point for the 2nd one and afterwards.
Reasoning: Two 0-CP's seems a little excessive, given how many features are 0-CP. If nothing else, that means I can put all three damage types as (or) on a weapon practically for free.
3) Improved Damage Die can only be taken twice; it costs 1CP the first time and 2CP the second time, for a total of 3CP for +2 damage die steps.
Reasoning: Damage dice aren't everything, especially at higher levels, so I don't think Improved Damage Die should be valued so highly.
4) The Bludgeoning template for melee weapons is be 2 die steps higher on damage, not just one. However, it cannot take Improved Damage Die at all.
Reasoning: With the above change, this gives Bludgeoning 3CP in free upgrades, which balances it with Slashing and Piercing. However, it would wind up at max damage already, so it cannot improve damage dice further with Improved Damage Die.
5) With the damage die progression and the limit on Improved Damage Die, redo the Slashing/Piercing Template damage. Here's my suggestion:
As mentioned above, the Bludgeoning Template is 2 steps higher than the above templates.
EDIT: The above changes focus on the melee weapons; I've only just started to look into the ranged weapons. If one of the above changes would unbalance some aspect of ranged weapons, I wouldn't know yet.
I know that's a lot to read, but what do you think?