Heh, great story Munderbunny
Anyway, instead of nerfing skills, the other option would be to enhance monsters. Some suggestions:
Keep Normal the same - it's a playground for the unexperienced, things can be tested etc. But for Epic and Legendary I suggest:
Increase life for monsters in epic by 2-4x and in legendary by even more.
Add immunities - those little ice creatures should be immune to any kind of ice damage, just as fire critters shouldn't be hurt by fire. Spiders perhaps poison immune and ghosts physical immune. Skeletons piercing immune (what's there to pierce really?). Also give monsters at least some decent resistance to "-%reduction to health".
Also give monsters more specific attributes to their monster class. That means greatly upping the innate armor and health on crocs for example (they're basically walking suits of armor after all). Also let casters have a lot less health than warriors and a lot more damage and/or support abilities, so there's some strategy involved in killing of the leaders first.
Give random monsters spell scrolls (about the same frequency as they get MI's), it will lead to spell scrolls to be used more often as well as give some random difficulty increment to the game. Also give monsters a bigger chance to wear yellows (with half-decent affixes) instead of whites/greys.
Also, give monster casters a wider variability of spells.
As for the poison and bleeding damage; upping the damage goes a bit against the idea of the whole thing. Than it'd become just another damage type. I'd rather greatly increase duration, it keeps the spirit of poison/bleeding alive and with stronger enemies with better resists, poison
should be worth more. Ofcourse upping the damage a bit won't harm anyone.