DEX also adds to your physical attack, but only by a little bit.
Each point of STR gives you 1.3 physical attack and 1 ranged attack.
Each point of DEX gives you 0.2 physical attack and .2 ranged attack.
So you need 6.5 points of dex to match the attack boost that putting in 1 point of STR gives you. As you can probably imagine, a full dex build does MUCH less damage than a build that focuses on STR and goes for the minimal amount of dex required to hit (this is what most PVE builds go for).
Your friend probably dodges a lot of things, but if your friend is doing tons of damage, it is probably because they have their weapon enchanted or ele linked, or possibly both. It could also be that they're using some skill that gives you a naturally high damage base value. It is NOT because they went full dex.
Going full dex basically ensures that your toon will not do good damage without weapon enchants/links/using uber skills.