This is the dumbest thing I've ever heard. Nobody willingly sets themselves on fire unless they are staging a self-immolation protest.
I get the upsides/downsides to status effects, such as chilled making you resist fire but slow and vulnerable to frost. Skills that do damage to both the user, his party AND the enemies are utter nonsense, unless they are last-ditch heroic efforts that produce a massive, appreciable impact that makes the sacrifice worthwhile. I don't think Phoenix Dive qualifies.
Here's to hoping it gets patched out or modded out eventually.