Yeah, Lolth really really wants to go in an aristocrats deck. (For those not familiar with M:tG lingo, this is a deck whose MO is cranking out cheap creatures, then sacrificing them for fun and profit.)
Her basic use will be to turbocharge your sacrifice engine; as long as you can generate at least one sacrificial chump per turn from some other source, she can spawn two more without a net loss of loyalty. And if you already have plenty of chumps, her -8 enables you to turn a single chump into a heavy hitter.
Outside of an aristocrats deck, though, she's pretty weak.