The legendary ability's damage is counted for the monster's DPR (Damage Per Round), and DPR is part of offensive CR, and that's part of the final CR of the beastie...
I disagree with the OP. Legendary monsters are intended to be solos imo (they dont have to be, of course), and they can work just fine in that regard.
The DM knows his party best, their capabilities, their weaknesses. Just keep pushing the level up till your reach the challenge appropriate for your part. If your party is very high level, instead perhaps add spellcasting levels, or add some epic boons, or add more magic items, or add different legendary actions or lair actions - etc etc
Joe Liker said:-- The most pressing need is a way to deal with "save or suck" that is not as harsh as Legendary Resistance. I have seen a few suggestions, but I'd like to see more. One option would be to give solo monsters higher saving throw bonuses across the board. This is a rather swingy way to deal with it, allowing the spellcaster to attempt to cut the fight short, but with a greatly reduced chance (but not zero) chance of success. Another option is something like Legedary Resistance that only kicks in on "second round" saving throws -- it lets the spell take effect the first round, but then the monster can automatically break free on its next turn. What are some other good options?
Any suggestions?
I want to try working up a replacement trait for Legendary Resistance. It's got to be something always active (unlike Legendary Resistance), is not binary succeed/fail so a spell can have *some* effect or perhaps the slot is not expended (unlike Legendary Resistance), and has flavor/specificity which encouraged creative thinking and unique strategy (unlike Legendary Resistance).
Any suggestions?