I tested it out last night. I got my dagger from 105 to 156 in about 1 hour 45 mins off of Coffer key mobs in the Crawler's Nest (as 72 Bard).
2 words... HOLY CRAP!
Had 4 people in the party so the mobs died pretty quicky. 3 of the 4 were skilling up on gimp'd weapon skills and they were getting mad skillups too.