I actually like it, it thematically fits with necromancy. If it only changed your looks, then it would probably be a lot easier to create a simple illusion spell instead of wearing someones dead face. Giving the pain it is to get all the "ingredients", gaining the racial traits justifies the cost.

However, when you take the face of an NPC, do you look like that exact NPC or is it just some random NPC with the same race? Could we use it to kill an important NPC and pretend to be them while playing? That would be pretty cool. On a side note, can we hide the mask when playing so we can see our avatar? Not a fan of watching my character walk around with a box for a head.