I do agree that her E is the problematic part of her kit balance-wise, but I don't think this'll be enough to fix it.
The bubble travels really fast for a skill shot, making it hard to dodge even at its max range (which is sometimes effectively point blank via ult), and then there's no way to avoid falling asleep once it hits you.
I think the best thing to change in order to balance it would be the drowsy timer (decreasing with level), with the addition of some method to counteract the effect. There's no real point in the separate states of drowsy and asleep if the only thing that can be done during it is wait to fall asleep. The E is like God Lee Sin in that there's not enough counterplay.
So, with counterplay in mind, I propose the following changes for whichever patch zoe's inevitable nerf comes in:
Great big yaaaawn: The drowsy status effect now lasts longer before the target falls asleep, lasting 3/2.5/2/1.5/1 seconds (give time for the other changes to matter, plus adds a lot of scaling power in a decreasing reaction window).
No need to nap: A champion can wake themselves up by landing any of their abilities or summoner spells on an ally or enemy champion (this allows counter play by letting champions avoid the damage but likely forces the person hit by the skill shot to use their abilities sub-optimally).
A slap to the face is better than coffee: With the exception of auto attacks, any damage that would wake a sleeping champion will remove the drowsy status effect. (this forces zoe players and teammates to refrain from hitting the target until they fall asleep for that damage increase)
Wake Up Sleepy-head: An ally champion can 'tap' a sleeping ally to wake them up early. The ally remains stunned for the duration but the extra damage is prevented (doesn't reduce the power of the effect in lane, but does decrease the devastation of power in team fights, except for zoe supp/adc (because I've seen both)).
Dreamtown Speed Limit: The travel speed of dream bubble has been modestly reduced. (I can't dodge this fr*cking skill shot like at all: I have to hope the Zoe misses, which isn't the best strategy).