What about as an option? A rule for how to de-level could be useful for a lot of stuff, not just level draining monsters.
I think they're a bit whacked out, but theres something to be said for monsters that the players consider worse than lethal...
Nope. I am fine with Ability Damage (or applying penalties to hit points and rolls). Level and XP, in my opinion, should just be used to determine when you gain new stuff.