When I played 1E in the late 80’s, level-draining undead were already so unpopular with the players in our groups that DMs effectively never used them. We discussed meaningful alternatives to level drain but I do not remember anyone actually implementing anything. I don’t remember demons or devils being used much either, although there was no particular reason for that, other than the fact that only a few of our characters got played enough to reach very high levels. And the only people who knew that daemons or demodands even existed were DMs like me who obsessively read the monster books (yes, even FF and MM2

).
I could not articulate it at the time, but I think I now know why level drain angers some people so much. Level drain does not just damage your character in the game, it feels like it breaks the fourth wall by wasting precious game play time in real life too. One possible objection to that objection would involve asking why we play in the first place. Is it about the journey or the destination? Is it about the adventures we had and the friends we made along the way, or is it about the vicarious thrill of your character leveling up, collecting magic items, and getting rich? I would argue that for most people it is about some of each, and probably lots of other things too.
I do think that the character leveling system found in all editions of D&D creates and reinforces a dopamine rush response in players as they level up. It feels like “winning” in a game that does not really have any explicit win conditions. My parents never had any concerns with the chainmail bikini art or the occult references in D&D, but the one aspect of the game that my parents would always question (in a joking way) was phrased like this: “How do you know when you are done with the game if nobody wins or loses?”. And I would always argue a bit and then just shrug, because you know when you know. Level drain felt like it was threatening the whole endeavor and turning the game into a Sisyphean treadmill.
Besides the “Doylist” feeling of unfairness to players in the real world, level drain never made sense to us in an in-universe “Watsonian” way either. My Thief got level drained so now he has forgotten how to use magic scrolls - how does that work exactly? (Of course I do not recall anyone ever getting a chance to use that ability anyway...

)
Level drain seems to be one of those sacred cows of early editions that people either love or loathe, depending upon their perspective on what RPGs are all about. We don’t really need any more labels in the already fairly tribal RPG hobby, but it is funny to me how certain game mechanics spark so much argument, perhaps because they illuminate what people want in gaming. It cannot be purely nostalgic either, as some OSR games have gone out of their way to implement “tough” features for players who were not even born when the early editions were published.
PS: Some RPGs do not have levels at all, but use skills or powers of some sort to distinguish and develop characters, so those games would need some completely different way to model the horror trope of powerful undead draining people’s life force.