Your observation is correct. This issue has been brought up countless times.
For some reason or another Blizzard just does not care.
The only thing making sense is Blade Dance dealing physical thought and I agree that Demon Blades dealing shadow damage is trolling.
If they fixed our damage types or made Mastery affect all non physical damage (which is UDK mastery?) we would be in a better spot scaling wise =)
I can’t tell you why this hasn’t happend 4 years ago. I am out of words why it has not happened 2 years ago and at this point, why nobody changed it in SL beta is just beyond me and looks like trolling.
edit: the only good thing about our lack of scaling is, you can tank in dps gear and vice versa and still be optimal i guess
As far as i know (not much of a pvp player) chaos is shadow and fire in a school combined. Therefore you should be locked out of all shadow and fire skills when kicked on chaos dmg =)