Not sure what happened here, but I noticed that the Annihilate skill isn't actually damaging most enemies in multiplayer.
A couple of us were playing last night (out of the same house over the same router, if it matters). Both of us were spell casters of some kind (she was running a pure caster, I was going sword-with-catalyst).

Fireballs and lightning were all working just fine for both of us. However, Annihilate would only work on super large targets for me (like the giant Burner boss fight). It would not, however, damage pretty much anything else. This is in stark contrast to how it works in single player, aka like a veritable lightsaber that I can just swing in the general vicinity of targets in order to melt them.

Is this lag related, or is this an issue that's cropped up elsewhere too?