You said in another comment that you enjoy DMing a game that has unpredictable results for the DM as well. A lot of good advice has already been given, but might I suggest giving your players more agency that you’d most likely see falling into the realm of the DM usually, so they create unexpected events for you as well?
Say you have the character of your friend destroy said Annis Hag, but blast! she had a curse prepared to fall upon anyone who would dare defy her to the point of death. Now instead of throwing your idea of a punishing burden on the player, you could instead go: “You can feel an evil magic engulfing your very being. It muddles your senses and try as you might, you are incapable of escaping its grasp. As it burns itself into your very bones and soul, you feel one of your abilities weaken. Which ability is affected?”
That way the player retains agency, can pick the least punishing option (in their opinion), have consequences but it doesn’t feel like they just got punished for doing well or making a choice just as much as you simply deciding “That’s how it is now. Enjoy!”. Could also add an element of chance and put it down to a roll of the dice, but that might again feel too arbitrarily punishing to that character.
The curse then mightn’t just have that main effect, mind you. But at least the worst one is more down to what the character feels and fears rather than what the DM wants to dish out. It will also give you something to ponder and think about in how to work with whatever the player chose or came up with. You could let them describe how the curse alters their appearance, do they suddenly have a mark on their skin? If so where, what size, shape and color? Now you have a PC with an odd mark of their own imagination and you can build on that. Or the player might come up with horns sprouting from their head, etc. Using this, you can have NPCs react to these changes and really play into them.
Player Agency might help alleviate the feeling of it being a punishing campaign, by giving them some room to breathe in all the pressure and stress.