Ever played Eversion? It does the "progressively worse" concept very well, by subtly altering the game world in a predictable manner that compounds to the point of radically altering what options are available. If, as you progress, there are numerous "change points", invisible to the player, that, at each one, if the player has taken on enough powers, increments the world state one step away from reality, and you have the player phase into a diffrent realm, then give an entirely diffrent final level(roughly half of the game in size) for each possible level(Level design for it would be easyish: Start with the plain level, and modify it for the first alternate version, change that to get the third, and so on...)
Additionally, a metroid zero mission style network of secret paths that are more evident in the later stages of the game when you have taken the "correct" route, and take massive skill and/or knowledge of gameplay mechanics to access... Bonus: You discover the "portal" that allows your "buddy" to be there, and as you approach, the level difficulty increments as if you had made deals, but actually making a deal would block later parts, forcing you to navigate the most difficult setting with no help, plus your "buddy" turns against you and utterly refuses to help in the end(becoming the final secret boss?) if you manage to survive. In this secret level, have two routes, one hidden and nearly impossible, and one regular one. At the end of the regular one, the boss is impossible. At the end of the secret one, you gain powers from yourself, superior to any others in the game. Make them look like "good" powers, but after the battle, the player is corrupted and takes the place of the previous evil(Bonus: Have the name of the winning player become the name, after a minor alteration function, of the next demon for any new games started). Once again, leave a nearly impossible to spot alternative where you can avoid the fight. When accesed, have the screen white-fade to your character, in a psychiatrist's office, being declared cured, but leave a physical mark on the player that shows that the battle was fought in reality, not just imaginarily. Bonus: Make a sequel where you play as this victor character, with the name of the last player on your PC to win the first game through the "self-cure" ending, otherwise a lame placeholder. The character's conflict would have left a mental mark, where the character develops unnatural abilities. Have a similar secret within a secret within a secret ending that passes along the name to a third and final game. Have the second game never fully reveal that it is actually a sequel, but have the third tie them together. Have a final bonus area for players who kept their names from the first game. Reccomend a part of it as revisiting the first game's setting, as a visitor, not a patient. Where the player's old cell was, one of the walls rips loose if you enter, revealing a portal to another "secret" world. Final exit clip: Show security footage, player character passes through undamaged padded wall. Cut to final credits. Submit name to online "ultimate player" list.
How about that tangent?