The light looks fine, it just looks harsher because A) it's at night and B) there are no other lights. When you have more lights in an area there is generally more ambient light as more light bounces off local brush faces. This creates softer shadows.
If there is a problem, falloff isn't the issue, the bright blob of light near the source is the inner brightness angle. Reduce that, and the bulb shape when you select the light entity will appear reduced and not intersect the wall; so the wall wont appear super bright near the source.