I'm a 55 WIzard and yes, its very possible for a paladin to outdamage me, at least in an AOE group. I was parsing a group just for fun down in the Silent City, having the Pally pull several different groups of mobs at a time back to the group (2 Wizards, Illusionist, Fury, Necromancer, plus the Paladin). Now, I'm not too knowledgeable about Paladin skills but they have one called Consecrated Aura (think its a high 50s skill) and basically asides from sticking every mob to the tank, it allows the pally to do LOTS of dps. I thought it might be a bug at first, as I'm used to being first in the damage order I was skeptical. All of my spells are Adept 3 at least, and I was laying down my Forge of Ro before every fight began, and not to mention casting Frostshield on the tank every time it was available. On an average group of about 12-20 mobs that we would pull, I would average something like 800-1000 dps, but the paladin was averaging 1500 DPS. I think his high was around 1700, and when i saw this I naturally flipped out and reset my parser, but after several other people in the group parsed it also, it came out the same. Once again, not really sure still how the Paladin was doing it, but it IS possible for the pally to outdamage the wizzy, at least in that situation.
Greymist
55 High Elf WIzard of Oggok