Some good points there, I admit it seems that I've been falling into the pit trap of assuming that all devils will remain devils. Also some good ideas too.
After sleeping on it I think I might see the thought process behind the idea, though I think that a better idea might be, perhaps, splitting the former 'loths between the two factions.
Neutral Evil always struck me as the ultimate selfish alignment (if you'll excuse the Palladium reference). Sure, the other Evils are selfish but they have standards. Lawful Evil in particular demands obedience from 'lesser' beings and prizes a vaneer of civilization. Chaotic Evil destroys everything with only the meanest concept of 'heirarchy' based on bullying and the fact that more Chaotic Evil beings equals more destruction.
Neutral Evil doesn't care as long as they get something out of any situation. I can imagine a pre-4E 'loth being offered a choice between the two sides (and only one or the other, no 'middle ground) and shifting towards the Demonic because that allows them the most autonomy. If they joined the Devils, someone higher up would take all their hard-earned profits away. Being a Demon would allow them bargaining room for maybe their only defining characteristic: playing both sides against each other to come out on top.
Ok, that explaination's too rooted in the old editions but I think it makes a kernel of sense. I can certainly see the former 'loths as a faction of Demons out to make a profit for themselves by providing 'services'. All the better for keeping their skin where it is. Charon and his boatmen would be a good example. What might separate these Demons from their Devil counterparts is relative trustworthyness. Devils live to screw you over with fine print. At least Demons are open about their desires and, ironically, that could make them slightly easier to deal with if no less dangerous (of course, summoning fiends is still a fool's errand).
The Disease angle also strikes me as more chaotic than lawful, who lives and who dies in a plague boiling down to chance.
Another angle that might make them more demonic would be the 'evil through apathy'. The thought process could go 'I like seeing people suffer, but the whole infliction part's too much work. I'll just guide people to their doom, less work, all reward.' Charon, again, ferries you across the river styx for a fair price but won't lift a finger when the Marilith on the other side tortures you for the rest of eternity. After all, he's enjoying the show. This way, they don't fit in the Devil camp either. Following orders, backstabbing the guy above you, the danger in relying on others, it's all too much work. Better to be a free agent and take what you want from anyone willing to pay, willing or no, right?
EDIT: Just realized that I wasn't being too clear here myself.
The difference between a Devil in the above example and a Demon:
After contracting a Devil to transport you across the river Styx, it would immedately arrange everything to the letter. Then it would tell its immediate boss where it was going to land so that he could ambush you.
A Demon wouldn't bother telling anyone, it'd just make arrangements and drop you off. After all, what's the chances of a mortal surviving? Slim to nil. Even if they survive, the Demon gets the return fare, it's a win/win situation with less risk.