My reply:
https://www.youtube.com/watch?v=FNhYJgDdCu4 Yeah, try shooting a skilled melee fighter from a point-blank range, see how well it goes. You might get lucky with a pistol, if you know a thing or 2 about melee yourself, but if you have a rifle, he can easily turn your weapon aside and kill you. Not even mentioning that the enemy can dodge to the side, and rapidly changing your aim by 90 degrees is not that easy. Remember that to shoot someone, you don't only need to pull the trigger. First, you need to align the barrel and target's body in a single line. Easy from far away, harder from close-up.
So IMO it should be the other way around, if anything - shooting from 1 tile away should be really risky, instead of instawin. But this cannot be coded into the current engine (I think), since no matter the penalty, you always hit with a ranged weapon from 1 tile away.
This is for discussion. However what sounds downright silly to me is that you suggest the melee penalty completely disappears once you flank the enemy. This is balooney, since a) they're only
depicted as immobile, since its TURN BASED GAME b) it'd defeat the whole purpose of this mechanics as you can easily circumvent it by spending paltry 4 TU more on movement.
Attacking from the back is already hugely advantageous, even if the enemy doesn't have any melee dodge, and if their armor is equally good from the back as from the front. You. Don't. Get. Reaction. Fired.
We must not be captive to game mechanics and remember that a melee strike in XCOM actually represents the whole process of attack, dodge, block etc; quite possibly multiple movements by both combatants; "swirling melee" as they call it in Warhammer.
Also, running. Well, that's another brain bug. You actually run much slower backwards than forwards, so you really cannot run from a charging melee fighter, unless you've seen him from far away (Reaction shots are supposed to cover that - unless someone gets surprised, because he was careless and used all his TUs).
As for missing 7 out of 10 - your melee fighter who was attacking was far less skilled from the target. Really, I would never even attempted a melee attack at less than 70-80% chance to hit unless desperate/in no risk. Your problem was using sub-par fighters and NOT GANGING UP. Soldiers working without support tend to die, especially if they push deep forward (as it is normal in melee charge).
What I'd put for discussion is... Is it a bad thing or a good thing that enemies don't react to melee? Not sure about that one, really.