The biggest effect I see that this does is eliminates high level casters from soloing certain dungeons without breaking a sweat.
Biggest misconception of playing casters (wizards especially): Nuke spells = 1337. They do not. My level 19 wizard can only cast about 10 undeaths to deaths (That's me using regulars, empowered, and maximized). I'd much rather turn all those undeath to deaths into buff spells and summon spells to actually make a fight carry over to more than one battle (If we're going to talk about soloing).
The logic behind nerfing undeath to death is flawed, since I can easily use the same argument on a lot of our favorite "I win spells" (assuming they fail saves): Hammer of the Gods, Wail of the Banshee, Finger of Death, Mass-Heal (vs. undead), Lay On Hands (vs. undead), etc. I could go on listening "I win spells" for hours.
Making it based on HD is more or less going to just make the designated spellcaster go "All right, time to use the next big spell."
And let's face it, even with it being nerfed to being based on HD, it's stilll going to dominate all the undead PCs, becuase of the fact that most undead PCs don't even have the HD to survive the blast, based on the fact that most of our undead are between levels 5-15. So, so much for creating balance between a caster with an undead-slayer and an undead.