But then there are the extremely high racial modifiers, which make far more sense for higher Hit Dice "magical creatures". Just as constructs, fey, outsiders, and undead are unnatural, so too are most monstrous humanoids and most aberrations. Turning monstrous humanoids into outsiders just because they don't fit the parameters you set forth isn't very good logic. Monstrous humanoids are just that monstrous humanoids. While certainly some would fit the paradigm, not all of them will. You could just modify the paradigm, leaving room for adaptability. Not to mention, turning a monstrous humanoid into an outsider is like throwing gasoline on the fire. They become more powerful and cease to fit the niche that they once fit. the niche of monstrous humanoid. Unless, of course, you were finally willing to concede that there are outsiders that are not gods and that some outsiders (legendary animals being one example you noted as not necessarily being divine) are racial in design, rather than postmortemmetamorphic. e.i. petitioners, which I can't really sink my teeth into. Some outsiders were intended not to be divine in standing, but rather a race of extradimensional alien entities of sorts, who could, by circumstance or design, become divine if they played their cards right. You could of course also concede that extraplanar entities, be they aberration or otherwise, are exempt from such mundane limitations and contrivances of the master plan which has been set forth. This would be accurate since medusa (gorgons) were originally in OSD&D considered to be natives of the elemental plane of earth. This would also apply to glooms (shadow), and other extraplanar beings (illithids, since they come from an alternate or material plane). Drow are a poor example since they have nowhere near the power of such beings and would not be robbed of their abilities, nor are they extraplanar in design. Not to mention, they just so happen to fit the paradigm, rendering drow a moot point at best, and since drow could conceivably acquire more power due to the paradigm, a useless point at worst. While I dont think medusa in particular would be too hurt, I do think Illithids, Gloom, and other alien entities, would be devastated by the stripping of power and the weakening of ability. Other races would simply hit them while they're young and wipe them out from memory, thus destroying the fearsome impact Illithids and other alien entities have on drow and the like.
So in short, it isn't really about them being unable to be interesting or powerful. A kobold on a stick could be interesting and powerful. It's about robbing various species of what they rightfully are due and what they have had throughout the history of the game. While there have been modifications from time to time, in order to keep the flavor, TSR and WOTC have both tried to avoid robbing the races of all their inherent racial abilities. So there must be some way to fix this fatal flaw, without completely decimating entire populations of monsters.