Ok, I know that magic is getting overhaul in next patch, but I need to post my experience from my last game.
I used some xml tweaking to fix the bug related to shard bonuses to spell damage, and played game with it.
Early game is same as always, I got earth shard, which only boosts a single spell (hurl boulder), making it only on par with melting touch. Magic is useful for combating creatures early if you lack good unit escort and that's it.
But in late game, when I got 2 fire shards? Oh boy, that was really something.
You must understand that every next shard gives extra +100% to spell damage.
So spell that can do from 0-15, can do 0-45 with 2 shards. With these, group of casters can do some serious mayhem (especially with area spells like infernal). I say group, since that's optimal way to play due to low mana regeneration rate (3 casters -> 3 mana per turn). Also, getting that tower that gives +2mana regen for kingdom factions (at lvl5 city) almost removes mana issues (that's essentially one Infernal per 2 turns per caster).
I even beat all master quest encounters with just spells (with exception or hermit who was killed by dragon breath).
What needs to be said too, is that casters are like glass cannons. They have so low health that single or two spells from enemy casters could kill them (defense helps, but they are still vulnerable to bad rolls). So who acts first will win, if both factions have lots of shards. This is directly linked to bad scaling of hero hit points. While normal unit gets its health doubled at level 3, heroes get nothing without investing on levelup, and even in that case that's no more then 50% gain (2x3hp). Which is something no sane caster would do, since they really need essence early.
Another thing important is that it didn't feel that my level 9 sovereign was any more powerful when using combat spells then recently imbued hero newbies that had only 6-7 mana points. They all pretty much did same damage. Difference between 21int from my sovereign and 14int from such heroes was hardly noticeable compared to +200% bonus everyone was getting from shards.
Near end of the game, while doing mastery quest, I was building two new fire shrines (which would lead to +400% spell damage). Never finished them, since I won the game.
