The problem with horror films is that they're best when they're holding back on what the Big Bad It is, and then they tend to collapse into (or explode out to) hysteria and histrionics. That was the problem with the Babadook, as it was with Kill List, and The House of the Devil. It's also the case with The Shining; in real life, a mad man running at you with an axe is even scarier than ghostly twins appearing at the end of a corridor, but not (I'd argue) in the movies.
The audience demands this release, of course. One horror film that I think manages to pull it off is Suspiria, partly because it's absolutely crazy from the very opening, and the descent into madness therefore feels of a piece with even the quieter scenes.
I haven't seen It Follows yet, but I really want to.