Phoenixes created too much imbalance even with a small amount of health (because resurrection is too powerful an ability for a city creature of level 7). Changing their stats too drastically makes phoenixes either too strong or terribly weak. It's better to leave them as neutral units.

This logic is incorrect because the strength of a phoenix can be adjusted, so it is possible to reach a point of optimum balance between being overpowered and being weak. Offhand, resurrection is equivalent to having double health. This is what should be considered, or make it 50% health, or 70% damage and health, or other similar options. Another issue is that such a unit creates an imbalance in terms of breaking through enemy defenses, as resurrection is much more effective in reducing losses than double health. But this problem is similar to that of vampires. However, unlike vampires, a tier 7 unit doesn't appear early in the game.