The physical reaction time / vision limitations could still make sense, as their technology could easily compensate for visual deficiencies or slower reaction time in areas such as aerial or space combat, and could even help compensate for shooting for the basic tau fire warrior (its easy to imagine enhanced optics or radar type devices, with computer assisted targeting etc), but close combat largely relies on the actual physical characteristics of the individual, where the tau may simply be lacking compared to humans. Of course, their larger suits may help by making them tough to injure, stronger and faster, which results in better close combat survivability.
just my 2 cents