The event puts you between a rock and a hard place. Taking it is guaranteed to ignite containment wars -- unless, of course, you've been sitting with your thumbs up your ass for the past few years as goddamn Prussia -- and it'll also leave you with a whole bunch of nothing to hand out if mil starts getting high late game.
But it can also give you an early Germany, an advantage not to be despised.
It's neat, offers nifty benefits and forces you to make a choice: go for broke and take on the GPs in a containment orgy, or wait and do it yourself through violence.
As I recall, Friedrich Wilhelm IV, King of Prussia, actually did get invited to become the Emperor of a liberal Germany during the 1848 revolutions, but turned down the offer because of the liberal reforms acceptance would have necessitated (and because the proposed German state would not have included Austrian lands).
How can you be unaware that the exact words of his rejection were "I will not accept the crown from the gutter."
The event pretty much spells out what happened to Fred Willy Four.
Why did he reject it? Dude was a dictator, just like the dictators getting their asses handed to em in the Middle East right now. Although most of them don't bother dressing up with a crown and claiming a god gave em the right to sit on the chair -- score one to them for their honesty? Why on earth would he care about rights for the very people he was conspiring to murder?
Then you have to consider the fact that thirty years prior people had been finishing up the bloodiest war they had ever experienced because of something similar that happened in France in 1789. You know, the single most formative experience for an entire generation? What odds would you give someone repeating the actions of Louis 16 a mere forty years later?
Had he gone with the Frankfurt Parliament, the history of Europe would have been very different. A newly liberal Germany probably wouldn't have stepped in on Austria's side in Vienna against the rebels who had gained victory so often, or murdered the peoples of Baden and the Palatinate. Louis Napoleon might have been scared enough of a liberal Germany stepping in against him that he might not have performed a coup on the Second Republic. WWI probably wouldn't have happened -- no crazed Kaiser seeking dominion over worthless lands -- and without WWI, no WWII or Cold War. Neat thought.