You have 2 weapons for a reason though. Put a Lightning Staff on one bar with all of your AoE abilities. Put a Fire Staff on the other bar with all of your single target abilities.
Against trash mobs you just stay on your lightning bar generally, cast your AoE and then heavy attack.
For bosses you cast all your AoE at the boss, then switch and cast your single target abilities. Repeat.
Virtually every magicka build out there has an exact 8 second rotation (the duration of Elemental Blockade) in which all abilities are cast.
Yes. It is indeed broken if it isn't actually increasing it. Now, I'm not too clued in on templar PvE, but this might be the scaling issues people had complained about, or maybe not.
How did you test it? Because in practical use 8% is less than that because of how diminishing returns on the calculation works. In any case, fire is still better for single target because of the much stronger blockade (damage on burning is extra) and weaves, both getting higher damage from things like DK breath, and more if dunmer.
It is working as intended, at least mostly.
You are suggesting the lightning staff buffs AoEs so it is better for single target damage does not add up. While I have not tested RO itself, what I have tested has found single target damage is buffed by fire staff and lightning buffs AoE as you seem to agree.
What you use on each bar depends on the build and how you use it.