[Dedas]

I use Acid Storm when I have warriors and summons with reasonable HP and no armor as it affects both your own and the enemy units.

I also use it without fielding my own army on the battlefield, only attacking with a mage scripted with acid storm and retreat. This way it affects even more enemy units.

The obvious way to counter it is to use units not depending on their armor, like high HP summons. This is not impossible as the spell is quite high level meaning that it won't make an entrance until later in the game. Another thing, creatures with natural protection is not affected by this so they are a good counter. Magical armor is also an exception.

A tip.
You can repair/replace lost armor in any friendly fortress with enough resources available.