I actually covered that in one of my other posts, but I'll re write it here from scratch for visibility.
You see, back when Vel'koz was still in development, Organic Deconstruction worked very differently for most of the development process. Instead of the three hit combo we know of today, Vel'koz would have each of his spells do a small amount of true damage based on the number of spell hits, heres the ghost of Rioters past (In this case played by Riot Subninja), regarding the development of his passive;
"In fact, until about 2 months ago, it would stack to full, and then would CONTINUALLY deal bonus true damage until you stopped casting spells. In the end, we moved it to more of a "stack and proc" mechanic, since tiny amounts of true damage over time are not nearly as satisfying as occasional huge chunks of true damage."
(Taken from; https://www.reddit.com/r/leagueoflegends/comments/1ytgt1/were_the_velkoz_team_ama/cfnmq9g )
It's true, we do melt the enemy squishy in about pi seconds, but part of that is the stacking nature of Vel'koz's passive. While percent max health true damage would accomplish this new Tank Busty role, it falls flat when it comes to satisfaction and visibility. As Riot Subninja mentioned above, it is extremely satisfying to get a burst of true damage off onto your opponent. In addition, with the visibility of his passive (both the set up and execution), it creates a healthy combat cycle for playing against Vel'koz. Do I risk the fact that I have one stack of his passive on me and rush in, or do I play it safe until that wears off? The giant burst is basically a big alert saying "Hey, this squid is dangerous!"
Even if the percent max health true damage was scaled back to some degree where it was doing roughly as much damage as we see Vel'koz deal now, it simply would not be as satisfying for the Vel'koz player, or noticeable for his lane opponent, other than "Wow my health bar is draining really fast."
(Also I feel really weird typing percent max health damage so many times)