Hm, that's a good point. And like I said, it's not totally implausible, as it's a simple weapon that's easy to conceal. Schala most likely relies on her magic way more, anyway, so she'd probably use the most convenient weapon she can use, which would be a dagger. Like you said, royalty use them for defense, and it's not as hard to use as, say, a bow.
Also, a small mess-up earlier in the topic, about Schala being good for a "Light" alignment: Crono's Lightning alignment is actually a censorship thing. In Japan many of his attacks were Heaven themed, and the element was called "Sky". So Schala could simply be another "Sky" person, (Similarly to how we have two non-aligned members, Ayla and Prometheus, and two Water members, Glenn and Marle) which you could rename to Light. Giving her Holy as a tribute to Final Fantasy would be nice too. (Although is Crono's Luminaire supposed to be a fusion of Holy and Ultima or something? I haven't played the retranslation, so I don't know. V's played it, though. He might shed some light)