I think this is a pretty interesting topic..
This card is indicative of a core design problem of the game itself, not this particular quest. Well, problem might be to strong, I think the LoTR guys do a good job with this, but it IS a problem that comes form the game system itself, something even deeper than the rules. The core concepts of LoTR LCG is at fault.
This game is, at its core, a Deck Construction game. Meaning that players build constructed decks from a large card pool. I do not think any of this in in doubt. The problem is that there is no way a dummy deck can possibly compete with a constructed deck let alone one that uses a hand, so spell can be held for strategic opportunities. Sentinels of the Multiverse (a coop card game that pre-dates LoTR) got around this problem by having per-constructed player decks. So the game could be balanced at the design level unlike LoTR witch is incapable of being balanced.
To put simply, the player's constructed deck will always be more powerful than the quests, and only get more and more powerful while the quests stay the same as the player card pool grows. Also of note is that as the pool grows the designers themselves do not foresee every single combination and synergy that dedicated players will find among the 100s and 1000s of games played. This can lead to out of control decks and combos that could even require bans, restrictions and errata.
So.. how do you make a dummy deck that is able to pose any kind of challenge to a human mind running a constructed deck? Well you can't really but this is the challenge the designers had. They took the approach of "set back" cards. Strong powerful cards that completely ruin the players turns. Cards that pop up and force a massive change in the game state. Wiping characters, raising threat, removing attachments etc etc. These set back cards force deck construction restrictions and strategies, they basically give the dummy deck a chance to win. They make it into a game.
So why are there a few super powerful ones? Well you can not put to many in or the quest will be impossible, but if you put in to few the quest has no chance of speaking to the future. As the player deck grows, these super power cards are designed to stay threatening, to add the chance for the players to loose even long after they are released. Still you need it playable now so as I said you can not have to many. So you end up with a variance of powerful cards usually with 1 or 2 extreme cards. This is a natural result of the design choice of this game.
The problem is that when these cards hit, often, there is nothing you can do. This makes the player feel that luck is more important than skill. In fact there are quests where if the player constructs his deck to completely ignore some threats in the hope he simply doesn't encounter it he can on average score better and win more often. You see if you build a deck to counter all situations your deck becomes "weaker" and so dose your score. If you ignore a threat, every time it shows up you loose but when it doesn't you win, and as they are few in a deck you are more often than not going to get though the quest with out the threat showing up. In fact it is possible to get a higher win rate ignoring large setback cards, and dieing when they do show up, than making a deck that can handle them or playing around them.
In a 4 player game this variance is much lower. These cards are nearly assured to show up as you are drawing 4 each quest phase. Cards which I believe are NOT designed to be encountered every time you play, they are in a way a surprise "got ya" card that is supposed to show up every 3 or 4 games. I very much think this game is a 2 player game that can be played by 1,3 or 4.
Still what choice do they have? This quest might be difficult now, but after the full outland deck is out, will it be as troublesome, let alone after a host of other releases to come? No.. it will not. While the flip a card - end of game problem this game has is terrible and i can see how so many people hate it due to the fact that you feel you are not playing, that skill has no meaning, that the only thing between you and loosing is what cards you drew of the encounter. This makes the player feel impotent and that his time deck building in meaningless. This game can be hugely frustrating, I know everyone that has played this game has had games that took less time than it took to set up. having your mate over and raving about this game setting it up and teaching and then being dead on turn 1 is just terrible.
To put simply.. "flip a card and loose" is unequivocally atrocious game design.
Still, I am not sure what choice the designers have. They do very well with this game and the core system of it requires these cards, so what is the choice? if you remove them and make them easier than this quest will never be played in a few weeks let alone years.