This is something I looked closely at for my Invasion campaign, in which most PCs are fiends. I ruled that innate SLA casting advances only with racial HD or something similar (i.e. bloodline levels.) Racial HD are actually very good for outsiders (particularly when they change size categories.) I don't feel that this is an unfair restriction at all, and it allows the player of an outsider to choose between focusing more on its heritage, or more on its acquired skills (i.e. classes.)
Of course, casting as a class should increase if you increase levels in that class.
Also note that most monsters have a limit on their racial HD progression; Sylphs can only take so many outsider HD before they need to progress as sorcerers (lower BAB, saves, and skills.)