Concept versus Story

I was kind of hoping that someone else would post between the last time I posted here, but apparently the forum isn't frequented very much by too many of its contributors...Oh well.
I am like Bobby once was (and still is?); I very much enjoy the concept of fantasy stories and I love to write them.  Why?
Because in fantasy, we can have MAGIC!  And demons!  And dragons!  My three favorite things!
And if we have magic, there are so many more ways to completely destroy people, and so many more reasons to do it!
But I absolutely loathe exclamation points, so I'll stop using them now.  I'm giving myself a headache.
I have been developing my idea on how it should work, and I came up with a little synopsis of a short story to help explain it.  I am parting with a little piece of myself now, since fantasy is, well...fantasy, so please be as soul-crushing as you can possibly be.  That's the only way to make it better.
Here we go:

There lived once a great sorceress in an unnamed land where to be fluent in the ways of magic was of little consequence to one's political and/or social reputation. This sorceress devoted her life to magic, and so she was renowned as the best, and people came to her for guidance and wisdom.
But what she forgot, what they all forgot to take into account was that magic isn't free. One's power cannot simply grow and expand for all eternity. There are limits.
We are all human. We are all weak and vulnerable, and we have no natural powers. We must manipulate our souls in order to perform this thing called 'magic,' and when we do this, we damage them. The soul can only withstand so much before it crumbles.
Yes, constant strain WILL make the soul stronger, but to a point. As previously stated, one's power cannot simply grow and expand for all eternity.
Our sorceress began at an early age, so her soul strained itself in an effort to expand itself faster to keep up with the rate of progression of her own talents, and so, by the time she reaches her twenties or so, it has done all the developing it can do, and she has reached her limit. When this happens, the soul is only there as a life force, maintaining spiritual functions. It is defenseless, and it is susceptible to corruption. A demon spirit notices this and devours it, and she is unable to do anything about it because she is so weak. The demon now has control over her every move, and it can call its own powers into being; it doesn't neer HER power, all it needs is a vessel, which it now has.
At first the people, trusting of her judgment and reputation, follow her possessed form without question. But the demon, who had no use for sentimental values, begins killing off people that had at one time been friends of hers. The people begin to suspect. When they finally come to the conclusion that she is possessed, they confront her, and the demon, having completely sealed itself into her body, is unable to escape. She is executed by having a metal rod run through her head and down her back, because the demon would have been able to heal any other physical injury. The body had to be permanently secured, then left to decay naturally, lest the demon find a way to escape. The rod cut off his ability to control her form and fixed her in an immobile position by passing through the brain and the ground. He is trapped, and his campaign to destroy the land is dismantled.

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So what do you think?  Good?  Terrible?  The worst thing you've ever read?  Should I expand on this and make it an actual short story or, more likely, a novel(la)?  Do tell, please.