Actually in my acoustic trio, it is sometimes hard to play softer than the guitarist while making the melodica fully expressive. We mostly play acoustic music at small venues or to small crowds. The acoustic guitarist and vocalist use sound reinforcement at the these gigs, and I still have difficulties achieving a reasonable dynamic range without sounding too loud (for I too use sound reinforcement and want to hear my delay and compressor working). That is how soft they (we) play sometimes.
Playing without sound reinforcement (fully acoustically), I can overpower the acoustic guitarist pretty easily and be the dominate instrument in the mix.
When we rehearse, I keep telling my group to turn up to stage volume, otherwise I have to play so soft that my instrument does not sound right. I lose control of the sound (notes do not sound, no dynamic range, can’t hear effects, can’t sustain an even amplitude when holding long notes).
On several occasions we played restaurant lounges, and 60 to 80 people drinking and talking would overpower the group. The guitarist and vocalist turned up their amps, and I did too. In those instances, I did have a hard time being loud enough.