Well, I still oppose getting rid of chicken skins altogether, although I don't know enough about leather-working to really speak authoritatively on the subject. It does at least seem to be possible, though (
http://www.bushcraftuk.com/forum/showthread.php?t=9971). Besides, how would Toady even draw the line between leather-giving animals and non-leather-giving animals? Size? A running list based on real-world resources? My expectation would be that anything with a skin can be tanned. Heck, even fish were used to make shoes in WWII era Denmark. (Again, though, I'm only a lay-person on the subject, so have a grain of salt).
If skins were treated the same as metal bars, needing multiples of the same kind (e.g., 3x chicken leather) to make one thing, that should clear up the balance issue pretty well; although I don't know if leather really can't be mixed in real life. Still, just raising the production cost of items at all should be a help, as would requiring stitching (another unit of cloth/leather eaten, with possible item value increase as a trade-off), or making egg-production dependent on diet, or allowing "friendly fire" between animals on the fort.
If chickens require protection from any non-grazing animal, whether tame or wild, the time and resources spent building a walled nesting area and herding them into it (only to lose them to hawks anyway) should more than make up for the eggs and skin. Heck, we might all be back here demanding more eggs per chicken in order to compensate.
P.S. I edited out the blunter part of my post, sorry about that. Why do I always have to sound like an arrogant dork on the internet?
It is the internet's main function. I've been a victim of it myself many times, I'm sure.