Soooo what this means is that since cards attached to domains would still have the title and card type, if they were considered "in play" then they would be considered valid for all sorts of targeting requirements. You could have Cthulhu eat resources since they'd be characters in play. The stories that resolve and remove "all characters with printed cost less than 3 (or greater than 2)" would remove domains. Etc etc.
Well, I've never argued that resources are considered 'in play'. Consider 'The Cats of Ulthar' (Dreamlands F116):
"Action: Pay 1 to destroy 1 Zoog card in play."
I believe it specifically mentions 'in play', so you cannot use it to destroy Zoog cards that are used as a resource.
However, being 'in play' is not a requirement mentioned in the rule text explaining 'sacrifice':
"A player can only sacrifice cards that he controls, ..."
Now, I cannot point to any rule text defining what cards are considered to be 'under your control', but I strongly suspect that the resource cards are controlled by their respective players. Couldn't an opponent otherwise simply drain your domains to pay for his costs? (also see below!!!)
The Cthulhu card specifically mentions that you have to sacrifice a character. Resources are not characters, but they _are_ cards. And that's what 'Horrid Dreams' says: You have to sacrifice a _card_ with the same faction symbol. IIRC, there's no other card dealing with sacrifices that doesn't specifically mention character and/or support.
The wording for the 'Servant out of Time' is misleading if it's supposed to be an exception to the standard sacrifice rules. Consider 'Obsessive Insomniac' (Dreamlands F24):
"Action: Discard a resource from a domain you control to ready Obsessive Insomniac."
I probably wouldn't even have thought of being able to sacrifice a resource card, if the 'Servant out of Time' had also used the term 'Discard'. However, interestingly, 'Obsessive Insomniac' indicates that at least the domains are under a player's control. I feel that this is further evidence, that the resource cards are under a player's control, too.