Cleon
Legend
Hmm, I think I'd have a few quibbles with that, but it's a good start.
Quibble away.

1) The original ability doesn't kill the creature, just draws energy from a dying one. (This is a problem with death knell, too.)
2) It should work out to a 10 ft radius.
3) I'm not sure that it should get a concrete benefit (though I'm not against that per se), but it needs to be dependent on having a positive level all the time.
How's this work?
Death Drain (Su): A death shade drains the life force from a dying creature. For every creature (HD of creature?) that dies within 10 ft of the death shade's host, the death shade gains 1 positive level for 24 hours. If a death shade gains Y positive levels, it reproduces by splitting into two, with each death shade retaining Y/2 positive levels. One death shade remains in the host, but the second death shade must quickly find its own host or die. Additionally, a death shade is dependent on positive levels; if it has no positive levels, both the death shade and host fall unconscious. Each day that the host is unconscious, the host/death shade must make a Fortitude save (DC 10 plus the number of days unconscious after the first) or both host and death shade die. If a creature comes within 10 ft of an unconscious death shade and host, the death shade rouses the host in a controlled rage and must kill the creature to drain its energy or die in X rounds. If the death shade gains a positive level, both it and the host survive, but the host must make a DC Z Fortitude/Will? save or take 1d3 points of Intelligence drain. The save DCs are Charisma-based.
Some of that is pretty much taken from the original write-up, and some is modified. I'm not married to the specific mechanics, but I'd like to see that basic flavor retained.
I still think it should apply a negative energy level to victims of its death drain, just to respect conservation of energy.
I'd rather it consumed all the positive levels in the process of reproduction, just to save on book keeping.
We'd better split the revised version into two (or more) paragraphs.
How's this:
Death Drain (Su): A death shade drains the life force from a dying creature. For every creature that dies within 10 ft of a death shade, the death shade gains 1 positive level, it loses these positive levels at a rate of 1 level per 24 hours. If a death shade gains X positive levels, it reproduces by splitting, this process consumes all the death shade's positive levels and leaves two full-strength death shades. One death shade remains in the host, the second death shade must quickly find its own host or die.
A death shade is dependent on positive levels; if it goes for more than Y days with no positive levels, both the death shade and host fall unconscious. Each day that the host is unconscious, the host/death shade must make a Fortitude save (DC 10 plus the number of days unconscious after the first) or both host and death shade die. If a living creature comes within 10 ft. of the unconscious death shade and host, the death shade rouses the host in a controlled rage and must kill the creature to drain its energy or die in Z rounds. If the death shade gains a positive level, both it and the host survive, but the host must make a DC W Fortitude/Will save or take 1d3 points of Intelligence drain. The save DCs are Charisma-based.