Zadok_Allen: Indeed Stealth is more of an exploit in W7 and apparently in W6 too.
I would consider it an exploit in Wizardry 8 as well, particularly if you solo with a class that gets Stealth, and especially if you spend time to raise it to 90+. It also makes encounters tedious, as enemies will keep defending, making it harder for you to damage them, and making it so that there is no danger. Even worse, you can't turn it off!
At least in Wizardry 6 and 7 you can choose not to hide. You could, alternatively, consider the following self-imposed rule:
No casting spells, using items, or breathing while hidden. Physical attacks are allowed (assuming they can result in you being seen) as is defending, but not doing most other actions. (I would allow running away while hidden.)