Correct, it's a built in penalty, but now there is a reason for LS to have significance.
True, but it still doesn't make sense for luxury to be related to life support itself, if conditions are amicable to life, then that's all that's required. Comfy seats and automated kitchens aren't really related to life support (however, the extra size penalty for first-class and luxury cabins would account for the extras required for luxuries beyond basic requirements).
If anything, I'd rather if they simply made life support actually provide direct mechanical bonuses and failsafes beyond simply slightly increased oxygen supply. For example, making the oxygen capacity scale with LS class, but make the duration depend on the amount of crew and passengers (maybe proportional to the square root of the number of passengers, possibly with further weighting for air quality as there's a difference between survivable and comfortable).
For example, a class 4C LS could provide backup oxygen for 10 minutes when flying solo, 7-odd minutes with a crew member in a Krait MkII or a little under a minute for a fully-laden Python of economy cabins. This wouldn't cause problems for the dedicated passenger ships, as even the lowly Dolphin has a class 4 LS slot, while the Beluga has a colossal class 8 LS(assuming normal scaling, this means 16x the supply than the class 4).
Further differentiation between models could also be relating to the number of escape pods, with escape pods past the first generally only being available in higher grades or class 6+. This would encourage the usage of class B for combat ships to ensure enough escape pods for the crew, while passenger ships would typically want to invest in an A-grade LS for their passengers.
This concept could be taken further with certain passengers demanding certain safety margins, such as a minimum of 5 minutes of emergency air or even to have sufficient escape pods for luxury passengers.
Actually making them scale, rather than simply a tax on bit ships, would also make it more balanced for players to be able to install undersized life supports on their ships. Sure, you
could install that class 1D life support on your passenger Anaconda, but don't complain when the smallest of incidents results in the majority of your passengers dying...