I note the collateral damage calculations specify 10 damage for infantry instead of 1. I assume that means it uses tech modified values?
In that case perhaps collateral damage should be reduced by the armor tech of the owning side? Otherwise it seems like it would cause a situation where collateral damage becomes exponentially larger as your tech levels rise, since both weapons will be dealing more damage and ground units will have higher defenses.
Yes, it is modified by tech. More powerful versions of the same weapon type will do more damage. As defenders improve their armour, it will take more firepower to overcome them.
Also, as tech levels rise, population and industry will likely be larger so the collateral damage may not be much different in proportion.
I don't necessarily agree with this, but I can accept it (as was pointed out, weapons get more powerful, but also more accurate). However, I'll point out that right now weapons are rising by the
cube of tech progression; assuming tech progression keeps the roughly 20% increase per tier, that means every tech tier works out to something like a 70% increase in collateral damage, compounding. That's going to get huge fast.
And that's not tech tier over your enemy. That's tech tier in absolute, so by the time you're at tech tier 7, you're looking at ~46 times the collateral damage as base TNE tech.