The great thing about the Rue Morgues list of the top 100 horror novels is that it drew from several hundred years of material. In fact, The Monk, the oldest book in the series was written in the eighteenth century. Ironically, while The Monk has aged pretty well over the centuries, Kathe Koja's Skin, published in 1992, has not.
This is not to say that it's a bad book. In fact, Skin has compelling characters , a fascinating plot, and deals with extreme body modification, a subject that is always ripe for horror. (If you don't believe me, just look at the extreme piercings and ritual self-mutilations of the Cenobites from the Hellraiser series of films). It's just not really scary which is kind of bad news for a book that bills itself as "psychological horror."
But I'm getting ahead of myself. Skin, at it's heart, is a story about Tess Bajac, a struggling metalworker who wields together mechanical sculpture. Her artwork attracts the attention of Bibi, an aspiring dancer, who draws Tess into using her talents as part of a performing art group. However, it becomes clear over time that Bibi is mentally ill and has an obsession with self-mutilation that leads her to modify her own body in unhealthy ways though piercings and surgeries. Add into this the Svengali-like Micheal who exert influences over both of the female leads, we have a volatile mix ready to explode.
--Only it never quite does. All throughout the book, we are left with the idea that a something is going to go horribly wrong. But when it does, once in the middle of the book and once again at the end, it turns out to be nothing you wouldn't find in any conventional thriller novel. To put it in perspective, there are James Patterson novels that are more horrific than anything that happens in Skin.
Then, if the action is not the source of horror, then it must come from the psychological states of the characters. Unfortunately, that's not scary either. Tess, the point-of-view character, certainly has issues but she is also a decent person who has relationships with toxic people. As a heroine, she is ultimately too likable for her mental problems to elicit horror. Bibi is too dysfunctional to be sympathetic and Michael is deliberately supposed to be unlikable. As a result, the story comes off as a tragedy about relationships, and not necessarily a bad one, but again ultimately not a horror story.
Then, the only remaining source of horror could be the physical transformation that Bibi practices on herself as she is driven increasingly to modify her body. But again, while certainly not something a healthy person would do to themselves, it never gets to the point where it becomes scary.
I think that a lot of it has to do with the age of the book. Back when it was written, the idea of voluntary surgical body modification was unexplored in popular culture and the people who practiced it were largely an unseen subgroup. Unfortunately, the last few years have resulted in a surge of horror movies regarding surgical body modification with granddaddy of them all being the Human Centipede films, a film series with a premise so disturbing I can't even bring myself to watch them. Furthermore, real people with extreme body modifications began appearing on the public's radar thanks to reality television and online news providers need for click bait. (Google "Lizardman" if you don't believe me). In today's world, the modifications described in Skin, wile still off-putting, just aren't as disturbing as they were when the book was written.
In the end, I'd say give this book a read if you're a fan of tragedy or relationship drama but if you go in expecting horror, expect to be disappointed