Any ability to remove passive abilities would restrict future card design by greatly restricting the ability to add disadvantages like "Inaccurate: Has a chance to miss." to creatures. For this reason any suggestion that removes passive abilities needs to justify itself by being the restriction to this type of idea.
We tought about this, and yes you are right. So our modify will be
Cost decrease to 3 for unupped and it will only add the undead passive ability.
Cost decrease to 4 for upped and it will add undead passive ability, and give +1/+0 to all undead. (yours and of the opponent)