On Wait Wait Don't Tell Me yesterday, during the "Bluff the Listener" segment, one of the fake news items was about a new invention called "Welcome To My Nightmare", a "bad dream machine" which is described pretty much the same way as the Nightmare Machine™.
You can listen here:
http://www.npr.org/templates/rundowns/rundown.php?prgId=35&prgDate=11-12-2011 (starts at 4:21 in the "Bluff the Listener" segment).
The inventor's name is even Straus.
Could it just be a coincidence?