Chalk me up as another one who thinks it's perfect the way it is.
The spell can be quite a powerful tool but has so many conditions that have to be fulfilled for it to be used that i'd consider it a lot weaker overall than earth attack for example.
MR negates
It needs a SC with many kills to work, and an SC that can not dispose of arbitrarily large armies of chaff (no king of elemental fire will ever be afraid of VotD)
Casting several times can produce a lot of kills but here comes MR into plaz again. If you have a 10% or so chance to succeed having to succeed five times doesn't make the spell that cheap anymore.
There aren't many recruitable or summonable caster that can cast this spell.
Target must sleep. (many of the best SCs are undead)
You can shield against it with 100% effectiveness in a provice if you get a decent chaff-killer. Sure, they're not too easy to get but how many provinces besides your home province do you need permanently protected anyway?
If you manage to get all the conditions right the spell can be very damaging, but so can be many others.
A tactic isn't too powerful if you get hit once and loose because of it. If it's truly too powerful youd get hit by it all the time because everyone would be using it exclusively.
Removing the turn limit or making the defender survive on a draw would render the spell totally useless. Nothing worth killing with the spell would ever die to it. Any thug or SC hardy enough to rack up a few hundred kills will never be killed by the chaff, so overwhelming him and getting him auto-killed after turn 50 is the real point of using the spell.