By the way, is it possible to make a trait that gives +5 weight limit, and +2 initiative when using a bow? It would reflect the overdeveloped upper body archers get, and Tarth and Yithril would have it available after they research one of the archery techs.
Except that Yithril doesn't get ranged weapons (in the base game). Could work for a custom Trog faction, but not for base-game Yithril.
I do think init of weapons period is messed up and needs to be reworked
Staffs, magic staves, daggers shouldn't give init bonus or penalty. Weapons shouldn't give an init bonus period.
I'd be perfectly happy with initiative bonuses on magical weapons, since the item type should not affect the type of enchantments you can put on the item (at least, in my opinion - if a necklace can cause your sword to deal more damage and a belt allows you to dodge arrows better, I see no reason why a magic sword couldn't make you act more rapidly). Having the initiative bonuses on non-magical items is harder for me to justify mentally, but I see it as an 'ease of use' bonus. If they did rework the system, then I would want to see a more graduated set of encumbrance penalties, and non-magical weapons that have initiative bonuses should then at best cover the initiative lost through encumbrance. Initiative bonuses would then fall into the category of 'even though this weapon is as heavy as that one over there, motions are so much more natural with this one or fast movements are not as restricted, rather than 'because I have a sword this heavy plate armor I'm wearing doesn't impede my motion as much'. However, I don't think that this is going to happen anytime soon, at least outside of mods (I don't know, is the encumbrance penalty system mod-able?).
Edit: I suppose I should say something on topic.
I'm fine with bows providing an initiative penalty rather than an accuracy penalty, as bows already do rather poor damage and making them less likely to hit isn't going to help with that, and I think the reason for the initiative penalty is to keep people from abusing the tactical AI with large groups of kiting archers. Moderate initiative and accuracy penalties I could go with, but not no initiative penalty and a (large) accuracy penalty. The magnitude of the initiative penalty might need some evaluation, but I'd say that the main problem bows have is the ease with which you can make things that can close with archers before they can get a shot off (footsoldiers and horsemen with charge can cover half or more of most of the battlefields on their first turn, and they'll probably act at least once if not twice before the archers do, and once they close the archers probably can't get away well enough for kiting to be a problem).