The damage is calculated on the target's distance from the projectile, not the one holding the gun. The actual impact damage of the shots in Crucible is a flat 1, the explosions do up to 39 each. Recoil is the only thing that limits Telesto's range, as you can't reliably hit 5+ shots on people over a certain distance when dealing with the natural spread. Think of it as like asking why someone can kill you from far away with a Rocket Launcher.