Sneaking is definitively no more about damage.
You can still use it to hide and replace yourself in a fight, but it's not worth the cost damage wise.
It is also usefull if you like to steal everything etc... , but the scoundrel invisibility spell is enough for that.

So yeah, 1 point in sneaking for my rogue, just in case, but not more.
Sneak/Guerilla/Backstap combo was fun but completely broken in DOS, so they nerf it to the ground.
I hope it'll be "buffed" a bit, so that assassin-rogue may be viable again, without being a no-brainer.