The reason the card doesn't work is because if I am trying to win, I do not care how well you are doing, I care how well you are doing in comparison to me. If my choice is to make you and me lose compared to other players in the game, I will reject that choice. If the choice comes around to me and I find that making it is actually helping me win, then the card's design has failed. So in no cases where the card's design has succeeded do I ever make the choice to gain the card.
How do we counter this? One way is to only play with people who aren't trying to win, which actually describes many groups who like Lovecraft-themed games... they're after the experience, not the puzzle. I don't like that solution because I am not one of those people, but it may work for you.
Another way is to add a non-deterministic part... try this?
Nyarlathotep
$5 - Action
After discussion, each other player puts a card from his hand face down in front of him without showing anyone what the card is, then everyone turns it face up simultaneously and returns it to his hand. Whoever revealed the highest valued card, ties broken in turn order, gains this card and gains two Curses in hand and you gain a Treasure costing up to thrice the number of players revealing lower valued cards, unless everyone tied, in which case you gain a Gold and put Nyarlathotep in your hand.