The phasm's alternate form ability makes my skin crawl. It is exactly the kind of complicated mess that I was hoping that this alternative would eliminate. And as for invisibility, I think that a will-o'-wisp would do much better. The pixie form is too fragile. Also it counts as having already used up its daily abilities (since they are all 1/day) and so is not very useful in combat.
The blink dog trick is cool, though. Cast the spell, dimension door as a free action then dismiss the spell... Wait a second. Dismissing a spell requires verbal components, which a blink dog can't manage. That's funny: the sorcerer is stuck in the form of a blink dog until the spell ends or the assumed form is killed. The same would be true of a number of other forms. (edit: fixed in a later revision)
But, yeah. The point about flexibility is very well taken. Sure, a sorcerer could charm a cloaker, or a will-o'-wisp or whatever, but it would take time to track them down, and if they died they could not easily be replaced. Meanwhile a 15th level sorcerer probably has eight 4th level slots that could all be spent on polymorph, and each could be used in a different way. Only for a few minutes each day, though. And charm monster has better action economy; you turn an enemy into an ally, and you still retain all your own abilities and actions. (edit: the spell is split; types that are immune to mind-affecting are now bundled in the 5th level version.)
Still, I really like the simplicity of being able to play a monster out of the book. I don't want to eliminate the special abilities entirely. I'd rather make polymorph a whole family of spells, each with only one form. Or maybe a couple of forms. Dunno.
@Amechra: no outsiders (even if you are one yourself), no spellcasting (neither yours nor the assumed creature), yes to the extraordinary abilities. You basically play a creature that has been snatched up more than half-way through its adventuring day (which is why its daily uses are over half used up).