http://www.cardgamedb.com/forums/index.php?/gallery/image/1355-city-of-gugs/

What is the usefullness of this card? Sure it costs 1 less than Dutch Courage, but it still seems to has many inherent disadvantages compared to its Syndicate counterpart. First of all, Dutch Courage gives ALL your characters +1 Toughness compared to the City of Gugs which only benefits Gugs. Secondly, DC's effect is reliable, while the CoG works only during Day. Third, CoG is unique, meaning only one can be in play while multiple copies of DC can be in play at the same time. Finally, CoG is a location card, which makes it far easier to destroy while DC is an item.

This ultimately leads to the question: is this card is poorly designed?

All good points. There is no question that Dutch Courage is the more powerful card. The best explanation I can think of, is that Yog-Sothoth has many more Toughness characters than the Syndicate, making a card that grants Gugs an additional Toughness that much stronger, especially since Gugs tend to have printed Toughness to begin with. They also have quite a few good reactions that trigger when wounded.

I could see this making it into a casual deck. It's by no means an upper-tier card, but I wouldn't necessarily say it smacks of poor design, either.