I don't think metamagic cost reducers are necessarily a bad thing.
I don't either, but all the implmentations I've seen (with the one mentioned exception) seemed to me to be too breakable.
You do hit on the problem though, and that is that metamagic is very hard to balance. Most of the metamagic in the game is weak and often too situational to risk. As with reducing metamagic costs, its also not clear to me how to address that problem. Sometimes it seems to me that the fair cost of metamagic is like 1/2 or 1 1/2 spell levels and the problem is attaining that sort of granularity isn't easy. The problem seems somewhat equivalent to the problem of balancing a Magic:The Gathering spell by adjusting its mana cost: sometimes 2 mana is too low, while 3 mana is too high.
I admittedly don't do alot with metamagic. Probably the most powerful thing I do with metamagic is a feat that lets wizards decide what metamagic to apply to a spell at the time you cast it. So, your magic missile in the 5th level slot could be cast quickened or silent, still, and empowered as needed for the tactical situation. But, it also requires investing in metamagic fairly heavily, so its not
that attractive. I also have a few feats that apply free metamagic to specific spells - for instance one that empowers any Monster Summoning spell for free when you use it to summon creatures from a lower level list and another that automatically makes a certain list of spells Silent and Still for free (specifically spells relating to 'telepathy' like Detect Thoughts). That is to say, if I can gaurantee the particular effect will be applied to a particular spell, I can easily find situations where the cost of the metamagic could be reduced without breaking the game. But as far as providing that flexibly, I'm not particularly happy with the options I've seen.
The top three metamagics in my game are: Heighten, Quicken, and Energy Subsitution. The rest, admittedly, tend to be ignored. Two of those have to do with particular changes in the way my game works, as in RAW Heighten is fairly useless. So, yeah, the idea is cool and I wish I had better ways to support it, but its proved a troublesome problem to address as side effects tend to be huge. Still is pretty situational best, but free Still is amazing. Empower is marginal, but freely empower at 1 or zero can be encounter wrecking. And if you can get cost decreases to stack, you are golden.
I believe most metamagic feats should do away with spell level increase entirely (or to a large degree for the more powerful ones), but be only usable a certain number of times per day. How does 1/day per metamagic feat you have sound?
That is the way that they work for spell-like abilities, and I must say, I've always found that makes metamagic very strong indeed. I'm not sure I'm comfortable with the cost investment involved in that compared to the power you get from free metamagic.