Problem is when you start seeing him in every ST deck.
First of all, he is not in every Scoia'tael deck, but if we talk about Dana Meadbh decks (which is only part of all ST decks), he is there very often, that is true. However it is fault of Gwent developers for designing ST mechanic and deck archetype this way.
It is similar with Witcher trio and draw&mulligan change. With old mulligan rules, Witchers were fine at 3 power. After there was change to "mandatory" mulligan 2 cards each round (instead of fixed number of mulligans for each leader for whole game) that provoked something like self-fulfilling prophecy and that change encouraged putting Witchers into almost every deck, because risk of playing with bad deal of Witchers was significantly decreased in comparison to situation before mulligan change.
When there is deck archetype, which needs just only best of the best from each race, it strongly encourages to play with the best of that race even if whole dwarven race would have been completely terrible and Sheldon would have been the least terrible of the terriblest dwarwen cards. Again it is similar to principle of self-fulfilling prophecy.
He is not played because of being overpowered, he is played because he is the best in deck archetype conditions, which were set by Gwent developers. In my opinion, there is not necessary any change to Sheldon Skaggs and also in this discussion is ongoing strong factor of something similar to "confirmation bias".
Edit:
Addendum
This whole "issue" about Sheldon Skaggs reminds me old story from Magic the Gathering. Many years ago, in past millenium, there was terrible useless card called "Bazaar of Baghdad". It had no suitable use and was just disadvantageous to play it in your MtG deck then after some time, there was added new expansion with new deck archetype, which exactly needed card like Bazaar of Baghdad and it was vital card for that deck archetype. Suddenly, that card went rocket speed climb in its price and was played in "every deck" of that archetype. Similar story could be told about another MtG card "Lion's Eye Diamond".
All those cases of 2 MtG cards and Sheldon Skaggs have same factor. Card itself is not overpowered and sits on right place of "evaluation vacuum", it is just developers, who decide to create new archetype, where particular card totally shines.