With these things said, bon appetite.
This is my favourite line. But, puns aside, I really liked the sub. Cannibalism as the bad guy is recurring, though not enough to be cliched yet. As was said above, I liked that this works for smaller and pettier foes.
However, I would like to note the rather rule-specific bent. I understand where you come from on this one, but it isn't necessarily needed. Most GMs can serve themselves the crunch to fit with your fluff if they have a mind to. In fact, most will need to either to adapt to a different system (Traveller Psionic-Cannibals, anyone?), or to give exact tables and numbers and die-rolls to what is provided.
Forgive me for needling what has already been mentioned more than once, Redgre. I liked the example, too.
I like it, too. It would be useful to have when running around dungeons and mysterious ruins. Just hope you don't run into a pack of undead. I think that a character may be well-advised to not charge it until the first creature killed outside of town, to avoid getting suspicious glances from the constabulary.
Which brings me to a question: Does the Blood Cloak always have the same amount of blood dripping from it? Or would it gradually lose liquid as the charge is used up? For instance, if you've almost run out of stored blood, might you only appear as some sort of crazed murderer with a few splatters?
Bonus points for providing a cursed equivalent.