Painful Grasp is a special attack. Considering it is a touch attack that deals 12d6 untyped damage and cause sickness for 1d6 rounds. I would not consider that weak.
A spell-like ability usually has a limit on how often it can be used. A constant spell-like ability or one that can be used at will has no use limit; unless otherwise stated, a creature can only use a constant spell-like ability on itself. Reactivating a constant spell-like ability is a swift action. Using all other spell-like abilities is a standard action unless noted otherwise, and doing so provokes attacks of opportunity. It is possible to make a concentration check to use a spell-like ability defensively and avoid provoking an attack of opportunity, just as when casting a spell. A spell-like ability can be disrupted just as a spell can be. Spell-like abilities cannot be used to counterspell, nor can they be counterspelled.
Blink is listed as a spell like ability. The section on constant spell like abilities says that reactivating it is a swift action. The that and the wording on constant spell like abilities indicates it can actually be turned off.
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It does have a BAB of 11, which means it does have iterative attacks.
BUT it also doesn't have any manufactured or natural weapons in the stat block (Supernatural Abilities don't count as natural attacks unless specified). Monster stat blocks only list the attacks for weapons they normally have. If it picked up a shortsword it could full attack with it at +7/+2/-3 (taking into account the penalty for non-proficiency). Similarly it could make unarmed attacks at +11/+6/+1. But since it doesn't have Improved Unarmed Strike or any natural weapons it would only do 1d3 non-lethal damage and provoke with each attack.
So that means all it can really do with an attack action is Painful Grasp. As a (Su) ability, it takes a standard action to use Painful Grasp. Which means it can't full-attack with that ability, and therefore doesn't have any iteratives listed.
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As for the blink: Mysterious Stranger posted the text about re-starting a constant spell-like ability. However; bear in mind that dismissing a spell or spell-like ability is a standard action. Which means it can't dismiss-attack or cast a spell-restart in the same round.
So yes, it would have a 20% miss chance per the rules unless it took down the blink for a round in preparation. (Int of 14, not stretching for it to do that, or to have the blink off if it has warning that someone is coming, hoping to get the jump on them and bring blink back up before its enemies can act.) RAI/GM interpretation: I'm wondering if this one of of those "oh, we missed that bit" oopsies that occasionally slipped into published material. With those powerful attacks and at CR12 full intangibility would have been a bit much, which is probably why they gave it blink instead as a defense, possibly forgetting that also gives the blinking creature a miss chance.
For a tiny bit more GM interpretation: I would say that Face of Death would not have a miss chance anyway. Although it's not technically listed as a Gaze attack, it functions like a once-per-day-per-target Gaze attack. And Gaze attacks can affect material and ethereal creatures with no miss chance (Bestiary 1 page 300.)
Another thing to consider is that while blinking your opponents have a 50% miss chance vs you. From a mathematical stand point that gives you a huge advantage. The fact that a Yurei has fewer attack makes it even stronger. The Yurei has a 20% chance to lose one attack per round, but any attack against him only has a 50% chance of working. That means every attack from every creature has a 50% failure rate.
From a tactical standpoint you are better off while blinking.