A few recommendations:
#1: The question of solving for which technologies avoid the curse or not is, IMO, easily solved by making the curse intelligent. The Shadow of Arrarat series features a similar curse that basicly freezes the western Roman empire in time. Progress occurs, but only because there are ways to outsmart or work within the curse. Sometimes, though, this curse 'realizes' it has been fooled and 'panics' which results in far worse disasters than the technology simply ceasing to function. So then instead of writing a huge list of what's in and what's out you simply have to spot call on what the curse thinks will work inside the memory and paradigm it has of what it's supposed to do. I wouldn't think of it as an entity so much as an extremely sophisticated set of operating instructions.
#2: I live inside of the steppe portion of the curse area, and 1870s technology is still going to leave the area relatively viable. The big pieces of agricultural equipment are windmills and barbed wire. And those are all possible with that date in mind. You can do a lot with that eras level of technology, particularly if you have time and attention enough to figure out how to use it cleverly. If you have trains you have massive enough transportation to still make large scale agriculture possible, and the inability to produce air conditioners would probably result in the local population making much saner choices with regard to architecture, city planning, and culture. Plus you can always herd cattle to where they need to be slaughtered.
#3: Education in the area is going to be fascinating. Basicly, historical research to discover or rediscover technology from the appropriate eras is going to cease being a simple academic pursuit and become big business on the level of any engineering endeavor. People are going to be develop amazingly cool land management techniques and are probably going to lead the world in magical and herbal medicine development.
#4: Military pursuits in the dead zone are going to be incredible. The civil war was run with technology from this period so there's a lot that can be done, but the region's ready acceptance of highly mobile cavalry warfare is going to mean that Cossack style stuff is going to become an American thing. If tensions are high with Mexico and the zone ends on the rio grande then you are looking at one of the weirdest military environment imaginable. Where I the US I would spare no expanse to take control of the hole of the rio grande valley so that you could run a modern war on the other side of it. Otherwise you're going to have to decide what happens when a powerful modern army fires munitions into a heavily populated dead zone area.
#5: If you don't have highways then navigable waterways are going to be a much bigger deal. Artificial canals will likely connect most of the major texas cities at least. Forest management is going to be a huge issue since you need to steam power everything. The army corp of engineers, on the other hand, is probably going to realize far earlier the importance of soft flood managment, wetlands and not building in flood plains, rather than using bulldozers to levy everything in. This will prevent a lot of current problems.
#6: Without accurate metereology the area becomes much more dangerous. Magic is going to be a huge deal.
#7: There's a lot of faith and folk based magic around here, New Mexico will do fine. Texans are generally anachronistic. Farther North people are extra-ordinarilly pragmatic. Those areas will be fine.
#8: Arizona, Colorado, Montana, and Idaho and the rest of the Rocky Mountain states are going to have a really nasty time if they're mining things out only with 1870 techniques. That's going to have a huge impact on the nation. I like the map I've seen don't move it further west.
#9: Less urban and more magical development is going to mean madness in terms of the local politics of the region. This is the place that birthed the progressives. You will see a third party in American politics representing the interests and lifestyle of the dead zone. And, given the rate at which people round here get reelected, they will have seniority in many major committees. In history, these are the people who brought electricity to the whole of American society through rural electrification and played a huge role in things like the TVA and Hoover. Now take those same incredible politicians, make them hostile to Tech, and see what happens to the nation.
My call, American becomes a national version of Chiba from Neuromancer. The government barely cares about tech. They do care about land management and organization, and the private sector loves tech. The tech divide will be crazy huge, but not just because there will be plenty of havenots. Without as much gov reg, the haves will be crazy fractious and divided. Extraordinarily wealthy and underregulated companies employing a mad elite of technophiles and technomages.
#10: Instead, America becomes the new Egypt. All that New Deal organizing becomes focused on the social magical rather than social technical. Giant mound raising projects and Ghost Dancing projects employ hundreds of thousands, and provide broad reaching magical prosperity for whole states. Complementary efforts on the part of Mexico and Latin America result in a rapidly evolving and syncretizing greater American culture.
Rather than American interest turning to its coasts and Pacific and European neighbors, the US and Latin America become intensely interested in each other. Competing and cooperating to create unique solutions to both general and specific human problems.
Socialized Magic and Free Technology. The Pan American solution.
#11: The Carribbean, with its few European colonies, becomes the meeting place of the cultures. This hotbed of competing ideas, magical, technological, and scientific learning becomes the cultural nexus of the world. A tropical version of Hong Kong and the South China Sea as all the nations of the world invest in this border region as a means of poaching the flaws and advantages of the other sphere. In turn, the region's hybrid culture produces the world's art and culture.
If anything, Austria-Hungary (Vienna and the heartland of Austria) would be more prone to Polyannaism than an excess of grimness.
