One of the key problems with Disc is that, as it grows in power, it constantly double-dips in output, benefitting from both more damage AND more healing at the same time.
So what if Atonement was reworked to something like this (numbers are hypothetical):
Atonement: If there is a nearby party or raid member with less than 100% health, 50% (or maybe all) of the damage you would deal is instead converted to healing on them. If there are no viable healing targets, you will deal damage as normal instead.
This way, a Disc priest would always be doing damage OR healing, but not both. The output would scale linearly instead of exponentially which would hopefully make Disc a great deal easier to balance.
I just don’t think Disc will ever be anything but a nightmare to balance so long as their power graph is a curve instead of a line.