Lords in Darkness, Re-Examining the Ravenloft Setting

I rather like the idea of the Ravenloft Campaign Setting, even as I doubt its usefulness as an AD&D campaign world, gothic horror and AD&D make a poor match in my mind. However, the setting as presented is riddled with inconsistencies and there's a terrible feeling of being trapped on a Hammer movie set sometimes. That might be OK if it were just the players who saw past the curtain, but as presented it's often the characters doing so. Oh, it's deadly and you lose a lot, mainly due to stacked decks and curses, but it's not so much horrific as it is perilous, a sort of 'Grimtooth's Traps' with a story-line, if you will.

One of the things I wanted to do with my currently on-going Ravenloft game was to re-work the world into something that made internal sense, while still allowing the chance that the PCs could find out they were trapped in a malicious demi-plane. In accordance with that desire, I decided to work out the rules I wanted my Ravenloft to function by. These started simply, I didn't want every domain lord to be able to seal their domains, I've never liked anyone but Strahd being able to do this and it always seemed too focused on the PCs (sure the lord could be after someone else, but really?), so I ditched that ability. Then I started jotting some more things down.

Political boundaries might be congruent with domain boundaries, but they might not...
Domain lords were trapped in their own stories and highly unlikely to notice anyone outside of their tormented circle.
Domain lords had to be scary, they don't need to be more powerful, just able to inspire dread.
The world as a whole had to make sense, the characters living there shouldn't realize they're living in a patchwork demi-plane.
There always had to be a path to success. This contradicts aspects of the gothic horror feel, but this is a game of AD&D, not the 'Fall of the House of Usher'.

More on this later...