PreciselySounds to me like there is nothing forcing them to stay in it, so they can walk out, cease taking damage, and not suffocate.
It'd work amazingly with something like hold perosn.
Yup, exactly. Deals less damage but has more uses than normal damaging powers of that level.I think that's the point. It deals a minimum of 3d6+2d6/level above 5th, if you leave immediately; not bad, but not on par with fireball, either. But a canny wizard/druid/psychokineticist will use it in circumstances where leaving is more difficult. Say by summoning a couple of fire elementals to sit in the sphere with 'em.