Yeah this is my problem with Fairies and their racial heal. The maluses they take to have this heal are WAY too high for how useless it is past the early game. A loss of 30% on base hp, -20% Melee damage (this is pretty damning itself), and -20% in collection (also pretty damning). All that for +8 magic attack (literally nothing later), +25 evasion (I don't seem to notice this at all as assassins still murder my fairies easily), and a 50% heal that not only has a mana cost but is also restricted to once a day.
Assuming you use the fairy early you will probably need to heal at least once every 3 - 4 fights, early fights give you about 5ish gold so you can do about 6-8 fights a day and get 30 - 40 gold. So not worth it. If you get one to mid game, you'll find that you either don't need to heal at all, or you'll regen whatever mana you spend on healing or even worse you'll heal them to full with a spell that costs less mana than the once a day Fairy heal. Oh and they also get access to Druid, which is...ok I guess. The best thing about it is the +20% earth damage, but you can also get it on races that don't have gigantic maluses.