Well, it seems like the general idea is already set on grenades not needing a nerf, but I'd almost go further: I think they are not worth it.
Priming grenades takes a LOT of TUs, what's that hi-tech timer thing? a swiss clock you have to calibrate? I wish we had some simple "pull the pin and throw" grenades instead. Most of the time, you can barely take a few steps after prime+throw, compared to molotovs and bombs, it feels very restrictive. As such, I use dynamite almost exclusively for damage, to take out heavy opposition (power armor guys and tanks usually get a few on one turn, to make 90+% sure they'll die).
You get more range with throwables, which somewhat lowers the need to take those extra steps, but 90% of the time it ends up in a grenade chain, and who, realistically, goes: "Here friend! A live grenade for you! Have fun!!" and means it? I try to avoid grenade chains because they feel wrong to me, which means grenades aren't worth it. HE and Frags would be okish starting weapons, but as opposed to bombs, you won't know until too late if that Osiron/Marsec dude died or not, so I go for the safe option: Bombs until they're down or hide and melee/bombs next turn. In theory, you could grenade + hide then check again, but if you hide, might as well not waste the explosive and just use the hide+melee/bombs next turn tactic..
The only 1x1 grenades I use are smoke and stun grenades. Both are pre-primed in my gals' inventory for quick use that feels a lot more like "pull the pin and throw". And if the gal goes down, well it's a cloud of smoke (which was probably needed since she got shot) and a bunch of stun (which doesn't do much at all), so who cares? Carrying around pre-primed explosives is too risky to me, even though realistically I rarely lose a gal and even more rarely get one stunned but not killed, so it could be worth it. It's just that, once again, who realistically walks with a bunch of explosives that, if dropped, will blow them up?
The final reason is overkill and loot damage, which is shared with bombs so not quite the same issue, but further reason to use guns/bows/melee to kill stuff instead of explosives.
So in the end, it's not that people self-nerf using them because they are so strong, but that there isn't really much of a need for them. One of the major use of high explosives in vanilla is also cyberdiscs, which are handily dispatched with (heavy) flamethrowers as well (and you can often do it in such a way that avoids return fire thanks to the arcing trajectory of the flamethrowers)