Skin Graft and the Shed Skin concept are basically similar in flavor only. Skin Graft does sound stupid good to me, just another one of those skills that will let you break the game, and another that skill that cries for larger skill requirements. Losing armor is a big downside, but the offensive onslaught it enables is extreme, especially later in the combat when you might have no or little armor anyway.
I actually use elven racial almost exclusively for the 1 ap bonus so I wouldn't want it nerfed. I'd rather see other racials buffed to this level.
Yeah, the damage boost is basically icing on the cake. I'd probably prefer making each racial significant rather than nerfing them all down to mediocrity, but an extra AP is a sizeable bonus in itself.
