It might be worth mentioning that I bought this because I felt it was a great piece of wry, pitch-black horror comedy [...]
I found "Willow Tests Well" funny in a way, but perhaps because I'd been primed by the Philip K. Dick story "Null-O," where Dick has fun with Van Vogt's notion of superior slans and unempathic logic: a bunch of psychopaths are recruited by the government (or the government within the government) and go ahead with their plan to return the universe to its true state of undifferentiated matter.
Although the Dick story presents the young super-genius as the main character, doing impressive things, Dick never lets us forget that these are terrible things. In a way, it reminds me of Norman Spinrad's "What if Hitler had become an sf writer?" novel,
The Iron Dream, where Spinrad shows how ubermensch fascism runs through Nazism and some Golden-Age sf; in Dick's story, we've got the super-bright kid, fighting against the mediocrity of the normal people--and he's a fucking monster. Since it's Dick, in "Null-O" the good guys turn out to be the small people--janitors, bus drivers, waiters, fry cooks, etc.
Nick Mamatas is playing a different game in "Willow Tests Well," with (as the outro pointed out) no victory conditions: this is a terrible conspiracy where even the revelation of that conspiracy would only make things more terrible. Willow can bend all she wants in the face of this storm, but surviving isn't the same as thriving. As for the revelation that most horror is human-derived, I agree with eytanz that conspiracy thinking tends towards the comforting: it's someone else's fault, there's a reason for everything. But there's the counter-argument in this story that the terrible things are being done for a reason in our name. This is, yay!, an other opportunity to bring up my favorite Foucault quote: "People know what they do; frequently they know why they do what they do; but what they don't know is what what they do does."
Dick could have the average people as saviors in a minor way; Mamatas points an accusing finger at the average person (us). Hey, I no longer find this story that funny!