Why has this not occurred to me before?
No matter how you cut it, the rules for damage from unarmed combat for AD&D always seem a little ridiculous, don't they? If a dagger does 1 to 4 damage, it seems the grossest of overkill to give a fist 1-2 damage, or even just 1 ... especially if the character is allowed the benefit for strength. If 1-2 damage, then the fist is doing an average of 1.5, and the dagger is doing an average of 2.5. Those two things seem too close together.
So you're pushed into rules like trying to account for punching damage being less effective, either by saying that it's really recorded in tenths of hit points or, alternately, the damage from it is regenerated or some such. I've seen both, and I have always thought of it as a pain.
Generally, because there are no rules for it, people tend not to punch one another in the game. It's a sort of gentleman's agreement.
The whole problem is with zero being the lower minimum for damage. You can't give a fist less than 1 damage on a hit, can you?
Listen, probably someone has come up with this before, but I haven't seen it. Why not make the fist a d4 minus 3? Then the strength bonus can be added, making the punch effective 50% of the time for 17 strength, 75% of the time for 18 strength and 100% of the time for 18/percentage strength. The average would then be -0.5, which would be 3 less than the dagger, so significantly below the dagger in power regardless of the character's strength.
I like it. I may have to stage a bar fight for the first time in 20 years of running.