Similar arguments can be used for Mangudai as well, yet people make Mangudai instead of regular cav archer, don't they? IF UU is strong enough, people will do it.well they can only be produced in castles, cost more than the knights-line and have the most expensive upgrades in the game... if you dont play vs goth in a super late imp game its never worth to tech into them.
Even though mangudai would lose to a regular fully upgraded CA (with all armour), people still use mangudai and consider it one of the strongest units in the game, because mangudai has bonus against siege, a common counter to archer lines (and of course better micro is a reason too).
A similar logic is applicable for Cataphracts as well. It's strong against a direct counter to traditional cavalry. The argument applicable to mangudai is even more applicable for cataphracts, since they resist bonus damage, while mangudai still die to skirms.
Currently we don't see much Cataphract, because 1 pierce armour is just too low and gets easily countered by archers.
Giving 2 base pierce + bloodlines would tip the favor easily, without making the unit too broken. Giving it 2 base pierce would make them undeniably superior to cavalier, and viable against archers.
But 3 pierce armour would be broken for a unit with no counters, that's 50% less damage from crossbow/plumed-archers and 33% less damage from arbs.
I think options are always great. It would be great to have the player decide, whether to make Catas or Paladins, depending on situation. 3 PA should be for paladin alone, since they can be countered by pikes