Hm. I see your point but I can't really agree. Obviously it's more expensive to level five skills (or even three skills) to level N than to level one skill to level N, but that's not an apples-to-apples comparison and isn't necessary anyway.
Let's stipulate that everyone needs to level Alertness and Athletics, so that's a wash. Let's only compare how you choose to deal damage, and we'll take Noburi and Hazō as our examples. We'll also compare only the skills themselves, not modifications, gear, etc.
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Taijutsu
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Water Whip
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Range
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-1 (melee)
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0 (whole zone)
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XP cost
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normal
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normal or 1/2 normal
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Attack action
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Standard
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Standard
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Weapon Rating
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1 (Ninja Hands)
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0
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CP cost to activate
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0
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38 (lasts 1 minute, i.e. longer than a fight)
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Actions to activate
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none
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1 Supplemental (has Reflexive Casting, so can cast off-turn)
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Defend against Taijutsu?
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Yes
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Yes
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Defend against Ranged?
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No
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Yes
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Defend against Melee Weapons?
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small or medium weapons only
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Yes
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Can you counterattack?
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Yes
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Yes
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Prevents target from counterattacking?
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No
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Yes
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Can use chakra boost with it?
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Yes
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Yes
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Can use Vampiric Dew with it?
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No
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Yes (iff created from actual water; only on a grapple, not an attack)
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(Red shows which one is worse on a given comparison. Orange is "worse, but this is a marginal comparison.")
It is very much unclear to me why Water Whip is worse than Taijutsu. They both have pros and cons but, honestly, I think WW is probably the better option for a primary combat skill.
As to the question of jutsu spec vs taijutsu, it's the Linear Fighters / Quadratic Wizards thing. Jutsu specialists will have far more overall effectiveness, which is why there are virtually no pure physical-combat ninja in either canon!Naruto or MfD. Look at Hazō; the reason that he won his fight against Kazuzuzetsuzui was because Hazō had HLaM, PCJ, and Ghost Scales. (Pantokrator's Hammer is simply a more cost-efficient version of chakra boosting so wasn't strictly essential.)
As to the argument that a jutsu specialist will spread out across 5 skills while a taijutsu specialist will only have 1 -- first of all, that's not apples to apples. Still, even if we accept that, it's likely to end up in the favor of the jutsu spec. Superlinear costs on skills means that it's more efficient to buy (e.g.) Athletics 30 + Substitution 30 (930 XP, total dodge of 45) instead of buying Athletics 45 (1035 XP, total dodge of 45).
EDIT: Colorized and/or rephrased items on the table for clarity. Edited the first paragraph to specify that all skills needed to be raised to the same level for the comparison to hold.