Looking at what you wrote, not the card itself, I'd read that the way you did: if you roll against Sanity, and succeed, then add 1 to any trait; but if you fail, then lose all your Sanity. (Ouch!)
And that makes it a much better Event, doesn't it? You either go with a trait you're already low in, expecting to fail and go to the minimum, or you pick you highest trait, knowing that if you fail, your character will take a huge hit.
A nice gamble...