I don't like your idea of nerfing Earthquake, I think it is pretty much fine as it is. The LOS thingy could be added, sure, but reducing its damage and giving it the ability to disable buildings would reduce it's usefulness to pretty much one situation: You are already winning the game and are currently in the process of sieging your enemy. As long as he has an army himself, you wouldn't be able to siege him since his army would stop you from doing so. It could be used on outposts, sure, but a nerf to that scenario would be even more unwarranted.
Earthquake has only one purpose, which is to destroy and/or heavily damage the base of your enemy. It is pretty much useless and not worth its cost in an army vs army battle, unlike the mines of Isengard. That spell has a long windup, but actually does pretty nice damage to units on top of its use against buildings. Earthquake can't do that (it stuns and stuff, I know, but that's not remotely worth 10 spellpoints). It can only destroy the economy buildings in the base of your opponent, military buildings will easily survive. This is just economical damage in the same way that forcing your enemy to rebuild his army by killing said army with the help of Vingilot or an Army of the Dead is economical damage. The added benefit of Earthquake is that your opponent probably has to rebuy pantry upgrades, but the other ultimate spells also have those benefits (AoD gives you mapcontrol, because your opponent lost his army, just as an example).
Remember, this is a 10 point spell, it is supposed to have a great impact on the game. Before you win, you still have to kill the army of your enemy, who in an even game should have access to his first 10 point spell roughly around that time as well, which is most likely to ruin your day. If the earthquake got reduced to something that could only help you when you already are sieging (=winning), I'd consider it more or less useless and never get it in a competitive environment.