With -75% tactical costs, I'd cast it alot.
*Casts Kill*...
*Casts Kill*...
Get moving already sean 
staves and daggers should also be no penalty, then swords could be -1 or -2, then move from there.
Basically, the real effect should be that bare hands is best for mages, to get rid of mages looking for swords and daggers.
Another suggestion is to make staves give additional Spell Mastery, so spells cast with staff's in hand would be slower, but more powerful.
Do kind of agree with the initiative should be topped with bare hands, and go down from there, except for the feel of it (every weapon will feel like it have a penalty)
whatever the devs do about this I wont mind though.
(as long as its not something really pointless, like making sledge hammers the ones with the least weight and more initiative
)
Edit: oh wow, I made multiple quotes work... dunno what happened! 
Sincerely
~ Kongdej (And his innate ability to produce mana).