There was and is the problem that attackers will also have a lot of mages/Thugs/SCs go insane to various degrees while bringing them down. This is a powerful defence as insanity has no cure in Dom 3 and seriously erodes the leaders use later.
Apart from making R'lyeh unattractive as an opponent it also makes using communions and the like when attacking them tricky. A master or two that decides to do something else can seriously mess up a script and hence the whole battle plan
The only things immune to R'lyehs insanity are their own starspawn priests and mages. Although I think the void gate itself when entered can drive either insane(?)
Re: How is LA R'yleh overpowered?
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