2) When they nerfed the headband from 19 to 17, they forgot to nerf the NPC stats too
This isn't an error imo. You scrounge the headband from his guts after he's met a violent death; I'm assuming the headband becomes warped somewhere during that process.
Hah! That's not how I read it, but I guess that would make sense of the facts

As to what the item should be, I'm happy that it gives 17 INT and so just +3 INT. +4 would (and did) seem too much. It makes it possibly a useful item for non-wizards who have some use for INT such as skill-monkeys, EKs and ATs, without it being so good that you'd build a character with INT as a primary stat around it, or making your secondary stat too good without investment in ASIs. I know it probably doesn't make a huge difference all things considered, but I'm still happy they nerfed it somewhat. (And also happy that it isn't an item that gives, eg, +2 to INT, but that's taking us still further off topic so I won't get into that!)