Yes, paladins can heal over and above the call of duty.
Do you forget GreenDragonKnights post about the amount of HP he healed over the course of the fight??
More than both the warden and fury in group. Ill go one step further to help you understand it.
If a palidin can heal 250k Hp over the course of a fight, then combining that with a defence skill that high, he would REALLY be invincible.
Shadowknights lifetaps dont work well because they take life to give life. So if you power those up enough to be able to reach a paladin HP POTENTIAL, then you will have alot of dead mobs out there. Which is why they havent adjusted them yet.
On a personal note, at level 39, myself, a paladin 39, and a monk 38, and the rest of the group being lowbies -34.
i tanked the Ancient watcher and the paladin played primary healer whilst we switched aggro back and forth over the course of the fight, it was a long fight, but the paladin healed me, spot healed the rest of the group, and himself.
I would take aggro long enough for him to get his HP back up and allow him to take aggro back, when he would get smashed for 1200HP i would take aggro back, and we just went along that way while everyone else whacked at it.
So imagine if he couldve focused entirely on himself??? i cant imagine how much HP that paladin healed over the course of the fight, but he did a darn GREAT job.