PW:Shield has historically been a good, well-balanced spell. It's an instant-cast shield, but you can also think of it as a front-loaded heal, or an extension to tank hit points, both of which are naturally very good. No other healer has a spell like it. It even has a cool echoing sound effect when people whack you while you are shielded! And yet the spell is balanced, by its cooldown and Weakened Soul, and untalented it's not as mana efficient as a heal.
It's been a spell that has always been very powerful, even back in WoW and TBC, and I think it has always been underappreciated and underused. Disc priests now understand its strength thanks to all of its new bells and whistles, but I think it's worth using as Holy too.
And if PW:Shield is good in 3.0, it will be amazing in 3.1! For Disc priests in 3.1, shields also cost 30% less mana, have no cooldown, energize the target with mana/rage/etc, and shielding anyone also reduces all incoming raid damage by 3%. This is in addition to how they are already stronger than normal shields, return mana when they are consumed, grant spell haste when cast, and with a glyph they even heal a bit. Don't forget the upcoming tier 8 set bonus, which grants 250 spell power each time you cast a shield. Not many spells have this many features!
So what prevents PW:Shield from being ridiculously overpowered? Once the 4-second cooldown is gone, only Weakened Soul will prevent it from being spammed. Weakened Soul makes using shield as a regular heal impractical, and means it will still only play a small role in tank healing.
I am not sure if this a healthy way for the Disc tree to work, with PW:Shield so insanely good, but with a harsh limit on how often you can use it to heal a tank (which is Disc's "specialty"). It seems a little odd to spend a dozen talent points on a spell, when perhaps it will only mitigate 1/8th of a boss's attacks. Is it unusual to have a spell so transformed by recent improvements, but have its balancing debuff unchanged since WoW's release?
An interesting side effect of all this is that PW:Shield is actually looking pretty good as a raid heal. A talented and glyphed shield costs very little and absorbs a whole lot (and heals 20% of that amount too). With no cooldown, and with Borrowed Time hasting each cast's global cooldown, it could mitigate a lot of raid damage from AOE or adds.
So, is PW:Shield too good? It depends on the encounter, and on how it's used, and on how Weakened Soul comes into play. We will see how well it does in 3.1. Perhaps the mechanic of Weakened Soul will be changed to let us shield tanks more often, or perhaps it will be kept as-is, to remind us that we're not just tank healers. In any case, PW:Shield and Penance will definitely remain Disc's signature spells, and all the shield buffs and the new Penance glyph should provide for some interesting options for Disc priests.