I really don't claim to know much about the direction the developers want to take the game or whatever, but I've seen the item you're talking about in action already. It's not really nerf worthy in my opinion. The guy is T10 and it allows him to do maybe 200 - 250 melee dps in an experience group, while healing, thus making his dps loss from healing smaller. This of course is with gear swaps for the purpose of melee and having maxed crit%, which isn't applicable in a raid where it would really count, because he loses healing power and mana which is needed.
Seems to me like just a fun item for casters to play around with and do some melee damage. Something like this would help enchanters for instance, they pretty much don't do anything in an xp group but GoG and the occasional mez because there isn't really a need for them to do it most of the time. They have a very low dps output and can use an item like this to do some melee in between GoG casts, making them more valuable to a group. Nothing really game breaking about that in my eyes.