If all monstrous pc based rp is intended to be simply about pvp, I'd say that can much more effectively be handled by DM run events and possessed npcs.
Rpwise I'd say there are many weaknesses various monstrous have and do rp, which could be used against them. I was under the mistaken assumption that weapons vs undead and blessing a weapon with the divine spell would affect undead PCs and was surprised to learn they don't. I'd agree that it is unbalanced but not so drastically unbalanced (when taking into consideration many rp'd weaknesses and other methods which could be used by resourceful pcs) that it totally makes the entire concept of monstrous pcs moot.
The experiences I have had in game that involved monstrous pcs greatly enhanced the atmosphere of horror, had a depth that npcs simply do not live long enough to develop as persona's (since they exist to be killed while most PCs, monstrous or not, will have some sense of self preservation) and gave my pcs something to actively fear; intelligent antagonists/villains and the threat of 'a fate worse than death'. An Npc can fulfill a lot of this but not in my opinion with the same depth as a PC since, when it comes down to it, they are plot devices. A lot of work went into the development of the various monstrous templates, a lot of work is done by the players of those templates to role play them to the best of their abilities.
If it warrants such, perhaps parts of this topic can be split into a discussion as to the question of should monstrous PCs even exist, since the issue of the 'bug' is moot due to mechanics and other factors.