| The thing is, they're not really 'paying'. Its not XP lost, its just offsetting the point where leveling up occurs. Considering what they get and can do, I don't think the offset I came up with for the Succubus is too terrible for a stretch of 6 levels--considering the alternative where they have to come in at 12th level otherwise, or advance along that craptastic write up in Savage Species.
The thing is, if racial HD is condensed into a class level, by a factor of 2 or 3, that would mean that the Succubus, using my formula, would come in with a group of 2nd or 3rd level characters, way too low for someone like that. | 
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