Good job Wick!!!! That looks like the floor covering type stuff like linoleum in a solid sheet made to imitate wall tile they used to put in bathrooms and kitchens and sometimes about 5' high as a wainscoat with a metal strip for a cap. Still see it occasionally in old bathrooms in colors like pink, etc which also matches the tub and toilet.
If that is what that is, then I'd remove it. Get a 12" drywall taping knife and remove it. Skim coat the plaster underneath it. Wear a respirator just in case it was made with any asbestos in it. If I have the wrong stuff then disregard this post.
By the way, I didn't mean for my ramblings about painting fireplaces and the trading spaces girl as directly related to my answer in my earlier post on this subject. But when you look at the price of good quality paint and primer compare it to how long it may last, for the money involved, it don't hurt to try to fix something like new to start with which is what I'd say to those who want to paint wood paneling and countertops.