It's one of the "negative" effects that allow items to have more positive effects. It's part of the "Random Magic Item Generation System" (RMIGS) that is very prevalent in the Shame Dungeon.
You ever do perks and flaws in Pen and Paper RPGs? It's a similar idea. Basically, when you get an item from the RMIGS it has X amount of weight based on your luck and some other factors. Each "good" aspect weighs a positive amount and each "bad" weights a negative amount. So you can get ++ something OR you can get ++-+ something. These negatives create the Unlucky, Brittle, Cannot be Repaired, and Cursed attributes.
Full details can be found here:
http://www.uoguide.com/Random_Magic_Item_Generation_System
I like how the system works, however I would not mind seeing a system for high level enchanters to "remove" the negative aspects of these items. I'd be happy to fold in some gold ingots and random Ter Mur loot for a chance to remove the -100 luck on several of my items!!