No. There is no damage ceiling. However, the law of diminishing returns hits HARD. A creature with 1000 HP will only deal 39 damage with the current formula.
The ceiling is mathematically 40, since
X / (X+N) for X ->
![Time :time](https://elementscommunity.org/forum/Smileys/solosmileys/../../../images/Misc/time18x18.png)
equals 1
40 * 1 = 40
More precisely, it is 37, since HP is capped at 499 right now.
Practically though, the formula means that Catapult works best when you throw a large number of creatures with medium HP (between 10 and 30 I'd say). So, either you throw a number of creatures with a number of catapults at the same time, or a number of creatures with a single catapult over a period of several turns, or the card mechanic is changed.
Generally though, the card does not need to be buffed. Right now it's not powerful enough to build very effective decks around it, but the same is true for cards like momentum, deflag, purify and the like. You don't build decks around these cards. You add these cards to a deck built around some other key cards as a support for your other strategy. Or you use these as a part of a larger combo (eg. to trigger death effects). But, no one says that the card must be good enough to form your main source of damage. Neither momentum nor deflag are a main source of damage. They are simply ways to overcome shields and other stalling things. And standard creature rush should always be faster than catapulted armagios. Catapults are not meant for rush! They are siege weapons xD
Siege weapons are meant to destroy strong defensive setups, not to rush. If we continue with the medieval reference, if you want to rush, you take cavalry and infantry. Cavalry and infantry beats siege weapons (even the anti-infantry ones, due to higher mobility and larger numbers), siege weapons beat fortifications. Fortifications beat cavalry. Simple rock-paper-scissors scenario.
Saying that 18 damage for a thrown Armagio is too little and should be increased, is similar to saying that 'against a very heavily defended deck (PA'd Dissipation Shield or a huge Bone Wall, or something like that, with SoGs, CC, antimatter etc.) dealing 18 damage per turn is low. The truth is that it let's you win in 6 turns. Almost no other card would allow you to deal that much damage per turn against such a deck. Of course healing remains a problem. That's why you might need to shoot in salvos with a number of catapults, or pack PC (eg. pulvy nicely fits in
![Gravity :gravity](https://elementscommunity.org/forum/Smileys/solosmileys/../../../images/Misc/gravity18x18.png)
decks) to deal with SoGs, while BB and GP can be used to deal with creature based healing.