Some ancient ones like Shub have uneven scaling with their reckoning effects, but Hastur is all over the place!

"Investigators as a group must lose 1 sanity per open gate OR the lead investigator gains a Blight condition."

This is trivial and virtually ignorable for large groups, but positively crippling for 2-3 investigator games.

Usually when an uneven scaling issue comes up (ex. Agreement condition 2 clue cost, Shub's reckoning monster limit), we have a house rule that assumes the printed text is for 5 players and scale from there. The problem is that can't really apply to Hastur's reckoning.

Anyone have recommendations for a house rule on scaling Hastur for small or large groups?

Nope. It's a good point though. My group always uses 4 investigators and splits them (even with uneven players, such as a 3 person game) simply because it's the "sweet spot" for many of the games mechanics.

I'm not sure how you would balance him other than making it trigger the entire damage on each investigator, but that seems like it would make him much harder.

Maybe something like for 2-3 players, roll a die for every open gate and collectively lose a sanity on 1-3? Same 1-3 if you choose the blight option.

Statistically that will end up being half the effect of the default rule, which we always assume is meant for 4-6 players.

For 7-8, lose a sanity plus an addition one on a 1-3. That averages out to x1.5 over 4-6 player games.

I'm not sure how you would balance him other than making it trigger the entire damage on each investigator, but that seems like it would make him much harder.

I've played that way before. It's devastating without a very specially tailored group setup (Wendy to soak the Blight Conditions on reckonings and/or a dedicated gate closer like Akachi to keep sanity loss manageable).

Though its possible you're considering scalability on only one dimension when the number of players can have all sorts of effects. Also, if you do want to affect it, there are the easier/more difficult reference card options listed in the FAQ, which also increases or decreases the number of gates that are opened.