I've not looked into the underlying mechanics of "flat-footed", "flanked" and so forth. I suggest that without being in stealth, you shouldn't be able to backstab an opponent unless they've another toe-to-toe opponent (aka, why Dark Souls backstab is so broken).
I am not sure how much you've played around with Stealth. That's one of the things I have looked at in v114.
Right now, Stealth is difficult to use in combat. Enemies sight range is reduced by only about 5 meters with 5 points in Stealth, compared to someone who has 0 points into Stealth. That's not much. If you enter a 'lit' area, you're almost certainly going to get seen, and once you're seen in combat, there's currently no feasible way to try sneaking again.
Plus, while in Stealth, your movement is greatly reduced. Getting into a blind spot is mainly done by separating the party, and having the party engage the enemy while the rogue goes all the way around the other side. It can take a lot to AP to get near a target while sneaking - more than you'd think, because since the enemy is facing your party, it'll move towards them and away from you, meaning you have to move farther. We're talking 2-3 turns just moving in Sneak mode to get into position.
You can get away with many backstab attacks while sneaking, but there is a chance for the enemy to notice that it's getting stabbed in the back, and turn around, at which point stealth is out the window. Once sneak is broken, it can't be regained.
A rogue's strength is high mobility - the Speed attribute. While that does improve how far a Rogue can move in Sneak mode, it doesn't help enough to make moving only in Sneak move fun. If a Rogue could only perform backstabs while in Sneak mode, I feel that it would render the class useless, because Sneak mode is not that useful to use for combat.
A backstab with a dagger is not such an overpowered thing that it needs to be nerfed.
