In Patch 3.2, Blizzard decided to remove Seal of Blood and Seal of the Martyr from the game. They decided that doing a lot of damage to yourself was not a good way to balance out doing a lot of damage to your opponent. In 3.1 they had already reduced the judgement damage and increased the seal damage to try to make the self-damage aspect of the seal less spiky. Paladins were knocking off a third of their life every eight seconds and it seemed pretty excessive and dangerous.
Strangely, though, the mechanic of damaging yourself to maximize your damage rotation has made a comeback in patch 4. By reintroducing Shadow Word: Death into the shadow priest rotation - that is, by making Shadow Word: Death hit like a truck - blizzard has put Shadow Priests in the position of giving themselves a good punch every 12 seconds. Given that Shadow Priest mana return is dependent on taking damage from Shadow Word: Death, there will be no escaping the self-damage.
Shadow Word: Death hits for somewhere in the mid- to high-six thousand range completely unbuffed. With raid buffs that could rise to somewhere in the neighborhood of 7500. A critical would be 15k. Shadow priests take 60% of this damage and immediate heal themselves for 25% of the damage dealt, so they effectively take 35% of this assuming they live to get the Vampiric Embrace tick. That comes out to around just over 15% of their health pool every 12 seconds. This is nowhere near former Retribution paladin self-damage levels, especially considering the constant, substantial self-healing that Shadow priests get.
The real problem is that when the enemy is below 25% health, the cooldown is removed from Shadow Word: Death and it does 30% more damage. Instead of 15% of their health pool every 12 seconds, it becomes 20% of their health pool every two or three seconds. That level of self-damage is completely astronomical, and not killing yourself becomes one of the major limiting factors for damage. If you get a big crit, you may have to worry about not getting that Vampiric Embrace tick because you are already dead.
Blizzard just nerfed Shadow Word: Death because Shadow priest damage was too high anyway, and Shadow priests were doing way too much damage to themselves on low health enemies. This change, however, reminds me a bit of the patch 3.1 paladin changes. After Wrath launched it took them quite a while to figure out that doing damage to yourself is not a good way to balance a dps class. Ultimately, I think they may have to learn this lesson again in Cataclysm.