I've used it against my party a couple times. It's way better than it used to be, but I don't think it's overpowered. In fact, I think it is still underpowered somewhat. Here's my take on it.
1) Requires ranged touch attack to hit. At lower levels, this can still be pretty difficult against certain foes. At higher levels, it becomes a near automatic. As a result, the easiest foes to hit are probably of the big'n'slow variety. However, those same targets likely have the most strength reserve, so 1 ray is far less likely to cripple them.
2) Opponent still has 1 strength, minimum. Characters with virtually no heavy gear (like say a wizard or sorcerer) may seem like tempting targets, but reducing one of them to 1 strength won't cripple them. The better targets are those who are heavily burdened to begin with (i.e. heavy armor, etc) but many of them will have decent strength scores, so it may take 2 or more rays to really cause them grief. Though it would be cool if the spell could drop opponents to 0 strength, that might be too powerful making them easy targets for coup-de-grace.
3) Maximum effect is not reached until 10th level. The 1d6 str + 1 per 2 levels means that this spell doesn't reach it's full potential until double-digit levels are reached. But by then, the wizard will have so many better choices to cast, it's hard to justify casting this. Instead, I'd prefer to see it be +1 / level topping out at 5th level.
4) On average, at lower levels (1 thru 6), the amount of strength damage will be 3 to 6. While that may seem like a lot, it's not enough to incapacitate anyone very often. But it will probably bestow a -1 to -4 on the target's attacks and damage for the duration.
5) Duration is only 1 minute/level. Lasts long enough for 1 battle, perhaps more. Not useful if you're trying to steadily widdle down the oppositiion over a period of time. I'd like to see this changed to be 10min/level or even 1 hour/level. Another option would be to have the drained points come back 1 per 10 minutes or 1 per hour. As it is now, the target just has to wait a few minutes and he's back to being all shiny and new. Thus, it doesn't force enemies to spend resources so long as they survive the battle. A longer duration would give affected targets a stronger reason to spend resources to overcome its effects.
One of the better targets for this spell is enemy clerics. Typically they wear heavy armor, but don't have strength scores as high as warrior types, and their touch armor classes are often fairly low. With a single ray or perhaps two, you can sometimes take a cleric completely out of action, toppling them over in their heavy gear. The spell can be useful in combating certain monsters.
So it's an interesting spell, but it is still outclassed by a spell like Magic Missile though nearly every 1st level spell is, so that may not be a fair comarison.