Yes, for the PCs who find this useless piece of crap. Really I would take a +1 armor over that any time. Heck, I'd propably sell it even if I don't have another magical armor and buy something useful from the money.
I don't know. That adamantine armor will negate probably as much damage as a difference in AC of 1. And it would negate the big hits instead of the slowly strung out damage. I know our Paladin would have preferred to take 12d6 instead of 24d6 when the assassin surprised him.