This is not an idle debate or theoretical practice. This is something in the game world now, at play, effecting characters and players.
To their credit, Diablo has fully employed this spell for what it is: a level two spell that can fix an opponent in time and space.
Compare this to scry for an insight
Alarm:
Alarm, extended lasts over three hours at level 10
It persists over rests
It is not bound by region or ring, you can sense an alarm from across the cosmos
It is undetectable, there's no contested roll
It is tireless, it fires as many times as there PC's who trip it
You can distinguish signals by stacking casts of the spell ontop of each other. 2 pings means location X, 3 pings means location Y. combined with that fact that this spell persists across rests means you can setup sensors across many choke points.
Given a characters spawn location or other easily inferable facts can locate them using the player list and log in time.
Totally hides your own location, you can spy on others with zero risk of revealing your own location.
Its a level two spell.
Scry on the other hand
Involves a special locations/foci to use
limited number of casts per rest
Can only be used against players in the same ring.
Involves contested rolls
Once per PC per cast is the general paradigm
You have to camp a scry focus to be able to reliably detect if somebody of interest is near
Not available in all locations
Single target, anything else you perceive must be derived from circumstance
If detected, reveals your own location
the ward area spell counters it
Its a level 4 spell (6 for druids and cleric)
Here's the situation
A thoughtful player can know somebody else logs in at a certain time of day, and given facts about their opponent, such as their spawn point, lay down a series of alarms to detect their movements from thirty or more rings away away and be prepared by the time the opponents enters a certain transition to hit them, with exquisite timing, with spells/summons/allies/traps/ etc.
Scry on the other hand remains an incredibly useful spell, but only usable on a much narrower set of circumstances.
To fix, one or several changes could be used
1.) I like the idea of a spider in her web, but it should be local. Alarm could only work in a ring or map that you are currently occupying. No telegraph of location 80 light years away.
2.) Alternatively, if you did want to keep the long range aspects, alarms should not persists across rests. That means somebody who set up 10 extended alarms has to burn through the slots and suffer the consequences of not having those spells when they rest
3.) Make alarms possible to detect. With the design of the game world you can 100% combine map knowledge and transition choke points along with player login times to geolocate somebody. That's too much power, especially for a level 2 spell. Plus it goes against the overall design principle where if somebody is taking a hostile action against your character, your at least have a chance to detect its happening
4.) Make alarms single fire. Retains a lot of its advantages, but now acts more like other traps , once its set off by whoever, it no longer functions. Why should a deadly trap from a rogue only get one fire (that can also potentially reveal location from far away) be radically different in this regard to a spell?
End of the day, Diablo's right. A thoughtful player, especially combined with map knowledge and OOC info such as log in time and player list, can use this spell to pin point movements of locations of many opponents from any distance and in a three and half hour window.
I have thought of several counters to this use of the spell. Lots of erratic movement, doubling back, standing for long periods of time on locations where you think alarms may be. Or idling in locations where it makes no sense to idle. Choosing inefficient routes. Using unexpected spawn locations, using variable log in times or intervals between logins. So far the counters have been reliably lame, and for how linear much of the server really is, ineffective.