This formation has been known earlier as "E-formation" and was at that time very much discussed with Skeleton bowmen.
Yes, except that this formation is expressly allowed -- the skinks are like reavers, or pistoliers.
But when cavalry charge touch the skinks... they are flanked -1 attack per base, right? So they are winning only few dice.
When normal shoot, I don't think that earns too much, because they shoot to the nearer, so I think doesn¡t matter if they are front or edge to the enemy
quote: I have never paly lizardmen or skavens, so my comment could be very bold... and bold words confuses with ignorance words 
As to bold/ignorance... this is just theorymaster for me at this point -- I'm not sure how well it actually works. But it seems somewhat easier to put into practice than the undead E.
True enough on the cavalry charge. That said, they're probably dead meat anyways, and at least their tighter frontage prevents them from being hoof-greased by two units of cav. For what it's worth, I think the big weakness is not the -1 per stand, but the fact that they cannot receive the support modifier. Then there's always sitting flank-to in woods/cavalry impassible terrain.
As to the normal shoot, the fact that 10 shots can be concentrated to a frontage of 16cm makes it a good deal more easy to focus fire -- 3 expected hits on a 4+ armored unit (counting the salamender hits) kills a stand and drives it back, on average, 10cm -- probably out of initiative range.
My hypothesis is that 2 skink+sally units could focus fire on a single unit in a battleline, but I'd have to get out some stands (or graph paper) and play with the geometry. .
Gutter runners seem a particularly nasty unit.
Speaking of skink's crabwise formation, what's the maximum distance an infantry column can move at 90 degrees to its line of travel?
(Why Warmaster might be a cool teaching tool for 10th grade geometry).