Sadly Cthulu has become kitsch.  There is a deep meaning behind many of the stories of Lovecraft.  Cthulhu also can not be beat as a metaphor for government, with the tentacles ever expanding.  The stories aren't really meant to be frightening in the way a spider eating human brains is scary.

This is taken from the wikipedia article on Lovecraft

"Lovecraft's major inspiration and invention was cosmic horror, the idea that life is incomprehensible to human minds and that the universe is fundamentally alien. Those who genuinely reason, like his protagonists, gamble with sanity. Lovecraft has developed a cult following for his Cthulhu Mythos, a series of loosely interconnected fiction featuring a pantheon of human-nullifying entities, as well as the Necronomicon, a fictional grimoire of magical rites and forbidden lore. His works were deeply pessimistic and cynical, challenging the values of the Enlightenment, Romanticism, and Christian humanism.[1][2] Lovecraft's protagonists usually achieve the mirror-opposite of traditional gnosis and mysticism by momentarily glimpsing the horror of ultimate reality. "

Truly, the morose and depressing imagery found in Arkham, MA is an accurate depiction of the South Eastern Boglands of Massachusetts (near Taunton, Raynham, Bridgewater, Fall River, Rehoboth, Dighton).  Having lived there for a time, I can honestly tell you, it is the most depressing place on earth, with Hull, England coming in a distant second.  Mr. Goldsmith told me that Lovecraft even visited New Hampshire, to explore the depressing swamps and forests that are to be found there.