Am I missing something? This plus Bitter Ordeal is game over.
Hum, taking my suggested change into account: (add a mana requirement, reduce life cost to keep him in play.)

Nether Scourge
Creature - Spirit
You may play Nether Scourge from your graveyard, but not from anywhere else.
When ~this~ comes into play, sacrifice it unless you pay 2 life.
Whenever ~this~ is put into your graveyard from play, you may pay
. If you do and ~this~ is the only creature card in your graveyard, you may return ~this~ to play.
2/2With an added mana cost the loops are restricted to X, where X = (your available

mana) -

(CC) / half of your remaining mana rounded down.
I think with Bitter Ordeal, that's not too abusive. If you started the turn with him in the yard, you'd need

to remove 3 cards and he'd still be in the yard.
There's always the option of changing the cost to a single

. In comparison to the above example, with the same mana investment, he'd only remove a single additional card. Problems then only start to arise when you add Coffers, Gauntlet, Heartbeat or similiar effects which turns the interaction into a 3 card combo all requiring a significant mana investment in themselves.
Don't forget that there's better and better graveyard hate out there with each set, so revolving your deck around a single interaction that passes through the GY is itself very risky.
Is

too little or

too much?
Is the life loss requirement needed with the inclusion of a mana requirement?
Can anyone think of other negative interactions taking into account the modified wording?