Here's something to remember for next time: use a program called strace
It traces system calls a program makes and it'll tell you all the files it tries to open, read, write and the system calls themselves a program tries to use. It would have told you that it tried to access /dev/ptmx and that it got a permission denied problem. Eterm doesn't give that error (it simply doesn't error check for ptmx apparently) but the error is hidden (thus can be revealed by strace).
Strace is very handy when it comes to debugging these problems. Sometimes seg faults can happen due to missing files but a program won't tell you. Before I whip out my debugger I just strace the program and look at what it was doing just before it crashed. Maybe a file failed to open and bad code made it crash.
strace can be found at
http://freshmeat.net