Why does this buck converter output such low current?
At 100% duty cycle, you are correct in that the diode will not conduct. Also, your buck inductor will saturate out and you'll have the input voltage (minus resistive losses) applied directly to your LED with no other means of current limiting.

You're not driving the MOSFET correctly. Your pulse voltage should be from gate to source, not gate to output return. Buck converters with N-channel series MOSFETs need a high-side supply. The MOSFET will never be able to fully turn on with gate and drain close to the same potential with respect to source, since the minimum gate threshold for this part (with respect to source) is around 1.1V.

Tangent: you said you want a constant-current supply, yet in your powertrain you're not measuring the current that you wish to keep constant. I don't quite follow how this is supposed to work. I would expect that you have some sort of current sensing element (like a resistor) in series with your LED, which would be used to generate a voltage to control the duty cycle of the buck to make the current constant.