Okay, lets look at the facts.
1) I have never been successful on an offensive war with Skeletons
2) there were 10 adepts + Saverous. Saverous had a 70% odds on Rosier if he had attacked. You had Rosier + 4 mages + some summoned pitbeasts. First round: I attack your pitbeasts, most of them die. 2nd round, you attack my skeletons, several of your units are wounded, by then I have already summoned a new batch of skeletons, and attack, win at low odds, and Rosier (who was probably already weakened) dies unluckily to a few skeletons. Because of this, your mages are still alive. (Basically, you were defending against the skeletons with only one unit, Rosier, because it wasn't until rosier died (due to his promotions) that the mages started defending. So basically you lost a hero and some pitbeasts to about 20 skeletons over the course of 2-3 turns. From 10 adepts. While invading. You invaded with 1 hero + 4 mages, while your enemy had an unknown number of troops.
I had Saverous, I had warriors, I had pyre zombies. I happened to gather about 10 adepts, 2 pyre zombies, and Saverous, and I only happened to kill you with the skeletons, but even without those lucky kills you would have still died.
None of this has anything to do with the fact that you could have still built up an army in your remaining cities ... which, I might add, were untouched. The only city destroyed was some Illian city which I razed the turn you captured it. (with some skeletons that had hoped to capture the city). I had used probably 50 skeletons in total trying to take over ALL the Illian cities, so I suppose I was a bit reluctant to let anyone else have them (other than the AI of course, whom I could more easily declare war on without the bitter game-lasting fall out of declaring on a human). So yes, I could have gifted you those cities, I could have let you keep the city (which, by the way, I only killed summons to raze ... so I didn't really kill anything permanent to you. Just access to a city which would have been isolated by Doviello culture anyways.), but if I had let you keep the city I would have just had to declare 'actual' war on you even sooner. Well, I suppose by killing your summons it was still war, and I did still raze one of your cities, even if it was under circumstances that I didn't think necessitated permanent state of war.
Even so ... after all of that, even if you did want to kill me, which, after all that self-justification, I think could still be justified (because after all, Civ IV is a tricky game like that

... just read some of the spoiler threads on Realms Beyond). What I mean to say is, I didn't mind that you wanted to kill me. What I am surprised about, however, is that you didn't have a more respectable honor guard for your hero, especially considering that you were going to leave the game if your hero died. Personally I don't find Valin or Rosier to be particularly spectacular, since they are often outshined by Mardero and Sphener in the late game. Even so, I can understand why such a hero, as powerful as he is, would STILL be a key playing piece in your plans. A piece so vital you might not wish to continue if they were lost even if it only reduces your chances of winning by 10%. Because of this, I think that your army guarding Rosier should have been larger. Just like your army guarding the Priests of Winter should have been larger. Remember also that in both games I played as the Sheaim. I have never officially 'won' as the Sheaim. I have been the last to quit, I suppose, and in that one SHeaim vs Illians games I suppose I did win because I made it to spectres. Two counters to spectre spam, however, are Stygian Guards and Diseased corpses. These units are death immune, and therefore immune to spectre spam as it reduces them to only 3 str summons. 4.5 str from a fully promoted mage (+50%).
Spectres beat Tigers beat Undead/Demon army beat Spectres. Its a paper rock scissors of FFH spectre spam. Naturally fireball spam beats all of these. But then again, Spectres are a lot stronger against Tigers and other living units than fireballs are (with a lot of mana).
Then you have the paradigm of Spectres beta Orcs beat Fireballs beat Spectres.
Yes, there are certain imbalanced strategies ... but I have never seen an army of pure skeletons take over the world WHEN NO PUPPETS ARE INVOLVED. And the puppet craze will be fixed soon (by having puppets be specialunit_summon, which means they don't gain the benefits of Twincast OR summoner iirc)
In any case, military wise, having Skeletons cause no War Weariness isn't that large of an effect. Sure, in the long term it makes throwing skeletons at people more feasible, I *suppose* but in my experience using an army of PURE skeletons only serves to feed exp to the defenders. At least 9 times out of 10.
The main strength of Skeletons is in defense of a nation ... and this has nothing (imho) to do with the fact that WW doesn't accrue from in-culture fights. The main strength, imho, is TACTICS, in that the defending units are (generally) out in open terrain with little to few defensive bonuses. THAT and fresh skeletons are often less than a turn away. Instead of an army that may or not come every 3-4 turns ... you are hit with an entirely new army every. single. turn. The only way to move the same forces on the offense is to risk your adepts/mages by sending them out in the field. This is very dangerous however, because only one lost battle can lead to your loss of summoners ... which is a very poor hammer ratio, as death1 adepts are basically 90 hammers instead of 25 hammers (warrior), and so them plus the skeleton ... means you get 50 hammers worth of troop for the price of 90 hammers. Wheras on the DEFENSE if you keep your Adepts inside the city .... depending on terrain, culture, and the type of enemy troop (and their leader troops) you can get at least 2-3 turns. Which is 2-3 skeletons AT LEAST. and add another skeleton for when they are attacking into your city. So thats 3-4 skeletons, lets just call it 3 for now.
So, assuming the average scenario, on the attack (assuming you move the adepts with them) you get 1 skeleton per adept, and on the defense you get 3 skeletons per adept. So on the attack you have a 45% loss in efficiency, and on the defense you have AT LEAST an 11% INCREASE in efficiency. Now, naturally, the great part about skeletons is that as long as you don't lose the adepts it doesn't matter what happens to the skeletons. So that efficiency will only go up over time ... but these numbers are to reflect the perfect loss ... ie, the amount of efficiency you get in hammers assuming that your skeleton spamming army dies as quickly as possible. Obviously this efficiency can increase quite rapidly ... but you always run the risk of simply feeding the enemy exp. The nice thing though, is that since you can quickly replace your losses ... as long as they occasionally lose at least ONE unit, it can still be worth it as long as they don't gain enough strength to overcome you. After all, evnetually their promoted units will die, while you can just keep making new skeletons.
Skeleton spamming will ALWAYS be stronger on the defense, just like every strategy OTHER than city raider 3 heroes. I think that having no WW would make em a bit more thematic, especially when fighting against the AI ... but I suppose its not necessary. It is certainly one of the stronger level 1 spheres. Still ... I've never 'taken over' anyone with just skeletons. Its always primarily involved some other troop type. (often spectres perhaps, but certainly not skeletons. I pretty much only use skeletons on the defense except for the AI and certain exceptional circumstnces ... and for funzies while playing the Sheaim

)