Wow, a beautiful, well thought out and insightful post. Followed by a bunch of poor responses that didn't seem to read the whole thing.

I would be happy if they removed the height / backstab completely as truer words were never spoken: "because the game turns into a repetition of King of the Hill each and every single fight with any verticality, at all."
Replacing it with +2/-2 would also be a good way to balance it while keeping a height mechanic.