I also felt like the lose self ability should be determined by the things that the character does to him- or herself, rather than by a level-based requirement which could be bypassed.
I like the idea that any artificial part creates Lose Self but I'm not a big fan of the ability. I agree it's a good idea to have but I would min/max my character to make that save as much as I could.
Currently, it seems like the basic steamborg ("Castor" Robar, for example) is to be pitied for the levels he wasted in getting the original class, when he could've gone into Steel-Bound Soul and gotten a bunch more parts for less levels. As things stood, it just seemed a bit like a PC could go "hey, lookit me, I took the extra artificial parts without pursuing the goal of the class!"
The Steel Bound Soul and Steamborg are very similar. They have the same hit points, saves and skills. Lets compare a multiclass Steamborg 6/Steel Bound Soul 7 to a straight Steamborg 13.
The SB6/SBS7 has artificial parts +7, steam powers 3+Int and the ageless ability.
The SB13 has artificial parts +6, steam powers 3+Int and the steel skeleton ability.
You are right. Steel bound soul IS better, but only by +1 artificial parts. I could point at the requirements but they are easy. I don't like crappy-feat requirements like Toughness, Dodge or Combat Casting.
The most generous levels for SBS are the last 3. If you take all 10 levels, you get +2 extra artificial parts and 1 extra steam power you wouldn't get as a steamborg. But then you run the risk of death. I ran these numbers when I made the class. I thought about an extra restiction or requirement but just wanted the "I turn myself into a machine" class to be effective (cough, cool). I didn't think it was for everyone.
Your argument is justified but perhaps an in-game restriction would be more palitable. There aren't very many steel bound souls. You should need to find one to become one. There is also the mentality of the steel bound soul, but it isn't much of a step from basic steamborg.
If you want to min/max a bit you can take Steel Bound Soul starting at 5th level, by taking the Artificial Part feat once or twice. I worded the feat that way deliberately but kept the skills from allowing you to take it at 2nd level. If you take the Steamborg Mark II, you get the lose self ability at 2nd and you can spend 2 levels in other classes - although you can pick up another steam power by sticking with steamborg. It gives the prestige class a little flexibility and rewards players who want to spend feats to get it sooner.
I'm not entirely sure that solved the problem but now you know the background and thinking for the steal bound soul.