He is the eel who woke up and saw himself trapped in his ancestry, trapped in an immense pattern he didn't create, and one that will easily survive his insignificant defection from it. In my reading, "The Festival" is Lovecraft's cosmic fatalism in miniature: all humanity is trapped in the patterns of entropy, evolution, and geology, to be destroyed by sudden unknowable catastrophe or erased in slow grinding erosion. The human who sees this clearly -- the eel who wakes up -- can't change it. The act of awakening, meanwhile, separates him from the rest of society.
Although I have to say that the Miskatonic University Library's policy of letting inmates at local insane asylums study the Necronomicon is probably not helping matters.
It's also interesting that in "The Festival," Lovecraft locates the center of the cosmic evil beneath Kingsport, which he based on memories of a 1922 visit to the beautifully preserved colonial town of Marblehead, Mass., which he described as "the most powerful single emotional climax experienced during my nearly forty years of existence... That was the high tide of my life." Somehow, for Lovecraft, the act of perceiving his utopia simultaneously undermined it, perhaps by awakening his cosmic perception: as he put it, the sight "identified me with the stupendous totality of all things..."