Yggaz the fool is definitely a character that lacks wisdom more than any other character in game. Potion of Literacy isn't exactly meant to give wisdom but it's best item that could help him to gain at least a bit.

The reason for having this RFE implemented is mostly aesthetic. First time I acknowledged existence of Potion of Literacy before drinking it I though not about drinking it or sacrificing to ratling but exactly about helping this poor guy in Terinyo. I was quite disappointed when he just refused drinking it.

Don't think it should involve big reward. But it definitely should shift alignment as this is an altruistic act. In addition fool should drop dozen potions of booze as he doesn't need it anymore, change appearance and do something different rather than exchange potion. Would be nice if villagers be grateful for the act.

If there will be a new quest or if educated fool could reveal some mysteries around scroll of omnipotence and weird tome it would be great as well. But it's completely another story.