It's intentional that people can steal the stone. Slightly balancing, hopefully.
Only the relevant part quoted. That has the same problem as Item Familiar, or a wizard's spellbook. Either the DM decides to take it and you suck, or you keep it and you're all-powerful. It doesn't make a good balanced system as it can only go to either extreme.
Also 4 attacks per round are really good at low levels still.