I don't know why they reduced HP on sovereigns either, except it was an attempt to get them in-line end-game.
It would help if you said what difficulty you were playing at, I find ridiculous way harder now for example.
Also I think the wraith blood, and the amarrian blood is more like a weakness, especially now, which is really annoying. Since some of the other faction abilities are like benefits.
If you are suggestion more HP at level 1, but same amount of HP gained each level up, then please state that, as I could see this as a beneficial boost (+5 hp at lvl 1, will not do a world of difference later, but would help especially a lot of new players get into the game).
The change to hitpoints effectively made it so both resoln and amarrian races gain only ½ of the hp per levelup of the normal races, this really sets a big difference between resoln heroes and yithril heroes.
Personally I feel the factions aren't balanced now, but hoped Derek knew...