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There's also a bit of an issue of "wasted stats". If you're building a Halfling Fighter to be, basically, the same as a Human Fighter, you're probably:
1.) Wearing Full Plate
2.) Dumping Charisma
So you have a race that gives you +2 Dexterity (absolutely worthless to you with a whopping +1 Dex limit) and +2 Charisma (a stat you care nothing about).
That ON TOP OF:
1.) A Str penalty (-1 damage) [Technically, really, -2 damage since you don't get a Str BONUS either. -3 because of 2-Handing)
2.) a CMD penalty
3.) Lower damage dice (depending on the weapon of choice, anywhere between 1-2 damage less on average, and a lower minimum damage as well in the case of the Greatsword)
4.) Difficulty of gaining Reach
5.) Turtle-like speed (20 feet a move is already frustrating, lowering that to 15 is excruciating)
The Small sized melee build then, generally, suffers the Death of a Thousand Cuts. It's not any one big thing, and it isn't TERRIBLE, but all the tiny little things add up in the back of your head quite quickly until you start wondering why you're bothering. Because there are very few (if any) character concepts you can execute with a Halfling that you can't with a Human...so you're hindering yourself for basically no reason.
That's part of the race. They have disadvantages. If I wanted to play a min-maxed fighter build then I wouldn't be choosing a Halfling. I'm playing the race and class because I want to make a character who has to overcome certain obstacles and learn to be more creative about how to achieve victory. He doesn't do things as well as other fighters but he has his own advantages. He doesn't move as quickly but its hard argue his proficiency at holding off a hoard of enemies in a narrow tunnel. He doesn't hit as hard but he has enough charisma to utilize some successful intimidate or diplomacy rolls to possibly shift the course of battle. I've never said a Halfling Fighter is as good as a human fighter in terms of a fighter, but they can easily keep up and at times outperform the classical builds because of their adaptability and unique ways of confronting certain situations.