I'm in the same boat as you. I love when the stronger magical items do have a drawback. Handing out only strong magical items just makes for OP PCs and power creep. I like to balance out the stronger items. It also provides a good background story if players want to investigate why this drawback is part of the item. Was the creator not that good? Did he goof up in the enchanting process and the blade misfires and hits anyone? Was it intentionally added as a trick to get even with an enemy?
I have a different logic - I simply assume that, if an NPC has an item, it is useful for *them*, and if the NPC is not an idiot, they won't use cursed items - and if they own items with drawbacks, the benefit 'd better be worth the drawback and more.
But the item is useful for the NPC, not necessarily (and usually not) for the PC. Most of the items they find on NPCs are sidegrades, or items that are specific for their profession, or tainted items (which are OK for the NPCs but not for the PCs). Basically, the immense majority of items that the PCs find is of no use to them.
As for power creeping, I don't really care as long as there is a rough balance between the PCs themselves. If they have powerful items, it means they have powerful enemies, and it all balances out. As a GM, I have all the tools I need to make them sweat whenever I want, so the only issue is whether the opposition they face is believable. Encounters are not meant to provide a tactical challenge, they are meant to further the plot(s), atmosphere and local tension, and move whatever story is being crafted forward. Thus, the real point, and where I really pay attention, is the non-combat capabilities of the items I drop in their path, because they are the ones that can make or break the overall "feel" of the game.
If, for instance, you GM a game where outdoors survival is a large part of the setting atmosphere, having item properties that provide the means to bypass those obstacles is basically a no-go, since it would destroy the illusion you want to craft. If the idea is to have them walk on eggshells in social intrigues and mystery solving (such as murder investigation), having on-demand past vision, divination and mind reading are a big red flag. And so on.
And if you base your campaign atmosphere around tactical challenges and combat grittiness, you ask ? Then of course item combat abilities must be balanced carefully, but balancing them with NPC combat abilities of the same calibre is an easy way out (so they get powerful enemies along with their great power)... and as I said, I don't GM combat-focused campaigns, so I don't have that problem :p
