I really don't think Negi supposedly "turning into a demon" has anything to do with the fact that Godel cut him- He said it himself, the Shinmeiryuu style is a style that chooses what it cuts- Since Negi was in his perpetual lightning form, physical damage had no effect on him, and so he switched to a techniwue that's based on attacking things with no form- ie; a spirit-vanquishing technique.
And also, thinking humans can actually become demons is also flawed- You're born as one or the other, Magia Erebea has nothing to do with demons whatsoever, it simply focuses your "darker" emotions, and eats away at your soul. If anything, Negi should be more cautious of the technique destroying him, rather than turning him into something else.
Also, it's a good thing Akamatsu is avoiding the generic shounen "powerlevels = invincibility against all opponents less powerful than you" trap, like Bleach and DBZ- The fact that Godel could take down Negi, who at the moment is (presumably) far, far more powerful than he, shows that at the very least, he's going the way of concepts and weaknesses, rather than straight-up powerlevels.