The problem I would have with that house rule is it still far too effective against high hitpoint creatures. Say you face Asmodeus, I believe he has 2,666 HP. If you get the spell past his resistance, (which by the time you face the guy, shouldn't be hard) he suffers at least 1,333 HP of damage. That's ridiculous. Epic spells don't have that kind of power. And it's worse for things without spell resistance and a lot of HP.
I personally prefer one of these house rules:
Harm still has no save, but has a HP cap. The spell will do 12.5 damage per caster level, so a 20th level Cleric will do 250 damage with the spell. It's still very, very powerful but will not shave off thousands of hitpoints on one cast, either.
And number two, Harm does have a save, if the save is failed the spell does damage as normal. If the save is made the spell will do 10 damage per caster level.
Still, that's what I like, and it's probably because my players are just an inch or two from epic levels and I will soon be throwing things up against them that have too many HP for me to justify allowing so much damage from one spell without a save. I also put a cap on Heal, as I did not like the idea of healing potentially millions of HPs with just one cast of one spell. But that's me.