Blizzard is suppose to gain an increase from gear that supports frost and spell damage. So if you have 20 frost or spell damage increase gear I believe it is half so +10 damage per hit. There is no damage increase from gear at all. It is doing the standard damage still.
You're mistaken in your understanding of spell damage coefficient and how it applies to channeling spells/aoe spells. 20 spell damage should give you next to no extra damage per tick.