If the DM thoroughly reads the spell description, and uses a bit of imagination, the spell is actually quite balanced, as there are many ways to damage and/or quickly remove layers of protection from a character with stoneskin. Some examples: Damage: any magical (i.e. Spell) attack, such as Fireball, Lightning Bolt, or Magic Missile, drowning, noxious gas, being buried alive, psionics, and Pick of Earth Parting.
Many of these also remove layers of protection; especially notable on this regard are Magic Missile and Melf's Minute Meteors, which have the possibility of removing multiple layers of protection per spell casting. No damage, but still affect the character with stoneskin: lasso, net, mancatcher, and bolas. Once the character is tied up, netted, or otherwise occupied, he is nowhere near as much of a problem.
Quickly remove layers: unarmed combat, burning, darts & other missile weapons with high ROF's, contact poison, acid, overbearing, multiple attackers, multiple attacks ( ... more.
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