I remember fire shield going from inflicting 2x damage inflicted on you to 1x damage inflicted on you to the current version. In the high level 2nd ed. campaign in which I played, all us magic took fire shield for the cold protection, as there were not as many defensive options then.
Having grown up on the old editions, I run fire shield as only inflicting damage on a sucessful melee attack my your opponent. It is my guess that that is how the 3rd ed. authors meant it, but who can say for sure. As much fun as academic discussions like these are, remember that the only correct answer to the question "How does X spell work?" is "However your DM says it works."