Well if your thiking about alternative archers like that why not just be a psion (shaper) using crystal shard. You can do up to lv-d6 damage an attack.
I have to agree that the penaltys seem random, pointless, and just plain annoying. The penalties most of the time seemed worse then the ablities granted by the item.
Most of the DMs i've played with don't want to kill the players. They tend to pull punches when a character is about to die or figure out some interesting way to get a character(s) back if somthing really bad happens.