It is exactly Level Adjustment, just done in perhaps a better way -- you don't 'front load' your character, you get them over the progress of your character.
Really, I think that if your players balk at the cost, I think they're going to balk at anything that is balanced with the cost, too. If they think it's too much, they think it's too much. But if you want to perhaps mitigate it, distribute it lightly, etc., you can just allow them to 'pay' the following XP at any point to get the bloodline power. They could even pay it over the course of levels by taking a fixed amount from them:
Minor = 11,000 xp, or 550 XP/level
Intermediate =16,000 XP, or 800 XP/level
Major = 18,000 xp, or 900 xp/level.
This is based on the amount of XP needed to gain the 'bloodline level,' but allows you to disperse it as you see fit. IMHO, phantom levels work better, since otherwise that poor 1st level character with a major bloodline is going to need almost double the XP to gain a level.
At first level, this basically equates to 55%, 80%, and 90% XP penalties, respectively, but this % decreases over time, so that by the time you're near the 'phantom levels,' your power is roughly equal with anyone else at that point (a third level character using the usual bloodline rules devotes about 33% of his levels to the bloodline, whereas a 10th level blood with a minor bloodline has only about 10% of his levels; an intermediate bloodline at 10th level would be about 20%).
Anyhoo, not sure if this will appease them, but it's reasonably well-balanced, still.
