I agree that the rewards are pretty poor.  I don't know about classes that would be looking at the dagger, but most mages will have done their mage quest by now and got a (blue) wand with identical dps to the frost wand reward here - as a frost mage I took the frost wand from the mage quest so the quest wand is pointless for me.  If it had been fire it would have been a great backup for when mobs are frost resistant :(