I think you got a bad one (rheostat). I use to use it with a rheostat on the cool side of my boa cage. I never had an issue with it. I was using the light dimmer at Home Depot to control it.

I would have thought the 8 watt heat pads would have been an issue because the use so little current. I don't have any issues with those either. I'll go along with you on not using it in the cage though. At least with any reptiles I have.