I like the lance of death in Larn, personally. Yeah, it's broken balance-wise, but once you get it, the game's mostly over anyway, and it's fun. I look at it like I look at the dark energy gravity gun segments of half life 2, or being supersonic in a sonic game, it's just a sort of reward for making it to the end.
Anyway, if you're set on nerfing the thing, maybe a better way to do it would be to have it damage the player every time you use it, or make them more vulnerable defensively while wielding it.
I really don't think it's necessary though, a lot of my favorite single player games have intentionally unbalanced rewards for their players. Morrowind is an unbalanced mess, and, in my opinion, it's all the better for it, or what about Crissaegrim or the Shield Rod in Castlevania: Symphony of the Night? The game is easy enough on its own, and it hardly needs those to make it easier, but they're fun.
I do understand that roguelikes are about challenge, but it seems to me that a powerful character fighting powerful enemies is more fun than if both sides are just average.