Thing is, he can hit each PC with probably two effects per round, maybe more: One from the Eye of the Beholder and one from the Eye Rays attack. Possibly more if the PCs are stupid and bunch up. Then you get the ongoing damage going with a -2 to saves and the players are really going to be hurting.Am I the only one who thinks that 2d6+7 isn't enough damage at level 29? Some of the higher-end players at this level will have upwards of 200 hitpoints. The Beholder gets a lot of attacks, but the damage is really low.
I think I'd probably still run this guy with my 75% hp and +1/2 level to damage which would turn the 2d6+7 into 2d6+21 damage - much more epic!.
Or, if you really want to up the damage, give it some fairly low-level backup with a damage boosting effect (crownwings come to mind). Five crownwings to give each PC a Mark of Death before they die, and now all the beholder's attacks to +10 damage. Ouch.