I think he was just looking at numbers. Last night I did a mix of looking at numbers and actual parsing, using these two weapons: http://rift.zam.com/en/item/DDF5C3B90501010101/Vallnara%27s-Bite
I was wearing no gear, and did four tests - using just the dagger, using just the axe, using both with axe MH, using both with dagger MH. The move used was SS, in a 33 asn / 33 RS build with no buffs (but there was the extra +5% crit from asn). The parsed tests included 50 uses of SS for each test, counted manually. Later tests were done with Final Blow used every 5 SS attacks.
What the parsing told me is that both weapons, despite their differences in damage range, crit for almost identical amounts. It also told me that the dagger alone does about 10 dps more than the axe, but this is probably insignificant due to an increased number of crits. When the dagger is used in the MH there is only a couple dps difference from the axe in the MH.
My anecdotal evidence suggests that the two weapons are functionally very similar. Damage did seem to vary, but I can definitely tell that weapon speed is accounted for somehow, as both weapons seemed to produce very similar numbers on each hit. I did some testing on crits as well, and found the two weapons to crit for identical values (or within 1 damage). However, I noticed a much higher crit rate on the dagger than the axe. I wonder if this is due to the extra dex, though 6 dex shouldn't make that big of a difference. The dagger was, on average, critting 1.5-2x more frequently than the axe for some reason. Probably just random chance. My final note here is that I did observe a lower low end on crits with the dagger; the average crit for both weapons was 266, both weapons also showed a high of 274, but the dagger also showed several crits at 239 whereas the axe never dropped below 250.
To conclude, I should probably do more testing but it seems to me that they are in fact normalized.