I'm making four decks for a big weekend demo of the game with friends and am noticing that many of the example mystic decks have forbidden knowledge. We used to put this in the deck and use it for knowledge checks. It got dumped so often we too stopped putting it in there at all in favour of anything else.......Im thinking I'm missing the angle?

Does everyone have more sanity than they know what to do with? Trading a sanity for two resources feels a lot more balanced than one for one. Like trading a gold bar for magic beans? Sanity is just too valuable or am I missing something?

It is certainly used frequently in Agnes decks. Using it is a free trigger, so it doesn't cause attacks of opportunity, and the horror it gives allows Agnes to deal 1 point of damage, which can frequently kill something. Agnes decks usually know how to deal with taking a lot of horror. It can also sometimes be really nice to get an extra resource for things like Fire Axe. I haven't played with it much, so I'm no expert, but those are a couple uses I can think of.

It's not too bad if you have Peter Sylvestre. Another thing is that it is not uncommon for the encounter deck to discard or reshuffle your asset so it makes a good fodder at least.

Unless you have a way to mitigate horror like Peter Sylvestre or receive some kind of benefit from taking horror (Agnes), I have found Forbidden Knowledge is not worth including. Emergency Cache gives you almost as many resources in one burst for no sanity cost.