>>96378125
Look at Fire Emblem's permadeath mechanic. Many times, it creates a cost-benefit analysis of "do I push on" or "do I stop and reset". Think of it that way. The cursed item should have a penalty, but not so much it screwed the character to the point where they make a new character... or to the point where they drop everything to go fix it (unless you want that to happen).
It needs to be enough that it can hinder them, potentially a weakness that doesn't pop up all the time, but when it does it's trouble.