Literally a torture device used by the catholic church which is a pyramid that the victim was forced to sit on as it slowly violated their rectal orifice.
Figuratively, it is anything that is 1) representative of "the system" or power structure, and 2) considered an annoyance or abuse to an individual or group.
"Tycho" of the the web comic 'Penny Arcade' used this term to describe Windows Vista in one of his news updates.
Some compulsory elements of a bureaucratic system could be considered analogous to a Judas Cradle if they are deemed unfair, unjust, inconvenient, too severe, or unreasonable, such as certain taxes or legal and economic restrictions, depending on your point of view.
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