Let me start by stating Siphoning Strikes in its current form is not resulting in Knighblades being overpowered when compared to other classes in ANY role. They are widely considered the DPS underdog. They hold their own as tanks, but DKs are still widely preferred. And no one would argue they're better group healers/damage mitigates than a Templar.
That said, any change to the existing value this skill provides must be balanced with similar changes to other classes. Anything less will cause the class to be even more under-powered when compared to other classes.
The primary value provided by this skill is BOTH stam and magicka regen to the caster. Removing 1 component is a 50% redux in current value. Removing 1 and cutting the other to 1/3 is an 83% reduction. Removing the 10% proc chance from Siphoning Attacks drops it even further, call it -90%. No other resource recovery skill change on test is even remotely close to this level of reduction.
The addition of a heal, while nice... is NOT a replacement for the lost value, and does not even bring the skill in line with similar skills from other classes. By comparison, Restoring Aura cost just 30% more to provide the same recovery for all 3 stats TO THE ENTIRE GROUP for just 2 seconds less, while also providing 10% tri-stat recovery for simply slotting it. That's a potential net of roughly 87k total resource (30k stam/27k mag/30k health) vs. 36k total (6k stam OR mag/30k health). Not even remotely equitable... worse so when you look at just the skill resource portion with the Templar skill providing nearly 10x.
I generally agree with a universal and proportional reduction of sustained, however this clearly is NOT in proportion to other classes, neither in the amount reduced, nor in the end result.
Here are some suggestions to retain the current utility while still reducing the sustained in a proportional way.
Option 1 - Scaled version of current skill.
Siphoning Strikes: Cost 800 - restores 396 Stam and Mag on light/heavy atk.
Leaching Strikes: Adds health recovery (not a toggle and no damage redux)
Siphoning Attacks: Adds 10% chance to proc 792 stam and mag on other direct damage.
Option 2 - Group Utility
Siphoning Strikes: Cost 800 - restores 396 Stam and Mag on light/heavy atk.
Robust Strikes: Also restores 198 stam to your group.
Arcane Strikes: Also restores 198 mag to your group.
Option 3 - Debuffs
Siphoning Strikes: Cost 800 - restores 396 Stam and Mag on light/heavy atk.
Defiling Strikes: Also applies Minor Defile.
Mangling Strikes: Also applies Minor Mangle.
Option 1 will be the least disruptive while providing the intended scale back in sustained.
Personally I prefer Option 2 as it adds some badly needed group utility to the class, and helps close the huge gap in the healer role, while retaining the basic function of the skill.
Option 3 provides rare debuffs, which fits with the current debuff focus of the class while retaining the basic function of the skill.
Note: If you feel the class needs a heal buff, simply buff the existing heal by raising the upfront cost and front loading it with a heal component equal to the damage done.