Unfortunately, the very visible spell effect (the iron crown) gives the game away against reasonably bright foes. Even if the hobgoblin king doesn't recognize crown of madness, it's pretty clear that when an iron crown pops out of nowhere on a guard's head and the guard goes berserk, something hinky is going on.This has a few more use cases than Hold Person that make it more versatile. It has longer range, it charms, it has the potential to incite infighting amongst enemies. Consider what happens when the hobgoblin guard to the goblin king suddenly gets a crown above his head and attacks his king when there are no visible enemies nearby.... In a story driven game, that could be a major turn of events.
There are cases where crown of madness beats out hold person, but consider that you give up:
- Your action each turn while maintaining the spell
- The monster being prevented from attacking your fellow PCs*
- Advantage on all attacks against the monster
- Automatic crit on any melee attack that hits the monster
- The monster autofailing Strength and Dex saves
- Any chance of people not realizing magic is involved
- One monster attack's worth of damage per round... maybe
- The ability to use the spell on targets up to 120 feet away instead of 30
- Dumb monsters might be provoked into fighting each other (but remember it only works on humanoids, so you won't be targeting animal-intelligence foes)
*Yes, I know, the charmed condition prevents the monster from attacking you. But paralysis prevents it from attacking anybody.