After further patch testing and some serious discussion, we've decided to add threat reduction deep in the paladin's retribution tree. As a result, fanaticism will now reduce threat caused by all actions by 6/12/18/24/30%, in addition to its current effect of course.
How does that sound? 30% passive threat retribution seems pretty darned solid to me. Let's hear it for Blizzard -- looks like they do listen to what their customers want after all.