I've seen this tactic allowed ... The big group tried this till they ran into a near max rolled damage fireball (only 6D6 IIRC for 35 or 34 damage) which killed all three clerics (each with well over 40 hp, dwarves and gnomes) who failed their saves (not even sure, I think at least one made his save). These three had been protecting 5 other chars though (at least one of them a rogue who made his save). Funnily the 18 hp elven wizard survived as well as my elven bard archer
Since this was a one-shot, the group was effectively done for without cure machines.
Edit: Without the huge spellcasting (each cleric 2 shield other on the other clerics for 6 spellcastings, plus 5 on the other chars for 11 Shield Others that lasted 3 hours... they bought two wands with their starting money) they would have survived... at least one Shield Other on the wizard would have made sense. Spending the money on Wands of Scorching Ray or something else would have been a good idea too.
So, I agree with Calibans RAW answer. But I don't think allowing this tactic would be too strong. Just let the NPCs buy necklaces of fireball. With any AoE effects, this Spell is nothing but a cleric killer.
I've had two clerics and a barbarian in a group before use a similar tactic.
One good massive attack on the barbarian solved the issue when the barb had over 50hp left and the non-combat cleric was in single digits after one round.
They knew this was coming when the area affect spells started getting used against them (as the Fireball mentioned above).
Afterwards they just began mega-buffing the barb, but w/o Shield Other.
Same Effect More than Once in Different Strengths: In cases when two or more identical spells are operating in the same area or on the same target, but at different strengths, only the best one applies.
Because they aren't in different strengths. Each shield other has the exact same effect, unlike say resist energy (fire) 10 and resist energy (fire) 20.