The velocity term being squared gives it exactly the correct importance in the calculation of kinetic energy. The mistake is made in the misuse of the resulting number in a particular situation.
Misuse of momentum works the same way. If I toss you a bowling ball and you catch it you'll have more momentum to deal with than if I shoot you with a 22 LR. Yet which projectile would you rather catch?
You are correct of course. Being a mathman and all. What I should have said is, the calculated KE gives a distorted representation of lethality because of the contribution of velocity.
As far as the bowling ball, what I said had to do with lethality of bullets and arrows, and momentum being a better measure of lethality with those.