My other problem with level drain is that it's just a waste of time. It's not even funny, like petrification and some save or die effects.
Drained a few levels? Oh damn, that's annoying... Well, I'm going to level up again, it only takes time.
Drained a point of strength? Holy sh*t I've lost a point of strength!
Yeah. It's not only a pain to de-level a character. It's also a pain to get that level back. One thing I've noticed is that DCC characters level at an old-school pace. That's not a complaint. But the games I've run it seems the characters walk away from an adventure with 10-15 XP. That can be anywhere from 3-4 adventures to get from Level 1 to Level 2. That could mean 6-12 sessions of gaming.
Again, not a complaint.
But it points out how levels are something that is earned. And having them taken away really sucks and not in a fun way like that bad guy took the magic book we needed to stop the dragon and now we have to go get it back and make him sorry for it.
This is especially true when levels are more precious and take a little longer to acquire. In the early '80s, I had a Magic-User in Basic/Expert that legitimately made it to 5th level. I thought that character was a minor deity.
Level drain not okay.
And your other point holds even truer. Players I've run/played with see stat drain as far more of an immediate threat. Whereas level drain is a de-protagonizing annoyance.