In the last sentence of this card, it says"...do 1 net damage for each card in the runners grip." Excluding any other factors, doesn't this essentially clear the runner's hand entirely? 4 cards in your grip means 4 net damage.

Yep, that's how it works.

The purpose of this card is not necessarily to kill, mind you. What this does is basically Time Walk you, because the runner's next 4-5 clicks are going to be occupied with refilling their hand.