It doesn't fix the issue Krensus outlined at all (that in some situations it's better to miss with Grease than hit with it). Enemies will still move in, get missed and then get slid back out again, wasting more movement than if they'd been hit and knocked prone...
I see what you are saying...provided the circumstances are right. That tactic is only effective in narrow areas when you can't circumvent the Grease spell. In my mind, its not an issue. Every version of D&D (and I'm trying to avoid edition wars here) had spells where certain circumstances made them rediculously powerful. This is just one of those times and even then its still not that bad.
For starters, using forced movement as we do, it breaks the infinite loop of attacks until a successful hit. Even if you allow the infinite loop, all you acheive is a knock prone. Next round, the target is already in the zone and can no longer be targetted by the spell. Essentially you have slowed his movement (and possibly his allies) and that is it. No more sliding because he no longer enters the zone since he is already in it.
There are other ways for a DM to circumvent this. Bad guys leave, comes back later, encounter ends, power dissipates. Monster roles, like artillery and some lurkers have the ability to bypass this. Some creatures can fly. Lastly, the DM can limit the free action of this ability to once a turn (not per round) because the DM has the ability to limit the number of free actions a player can make.
Is it a good ability on lower levels? Sure. Is it too powerful? Not in my mind.
Having said that, it is odd, that missing is tactically better but you aren't guaranteed to miss. At some point you will hit. I'm betting the spell will see some sort of errata - whether its changed to an immediate interrupt or the miss effect is changed or something else.
Edit - If you get knocked prone, don't you lose the remainder of your movement? If so, tactically, its not any worse than having the person slid out of the zone and he continues his movement back in and then gets knocked prone. At some point, he will be knocked prone, then he has to stand and then continue moving.