You all played it correctly, at least legally - though that's a lot of creatures being sacrificed to pass the "hot potato" around. Lets look at your real question. It's your turn (active player(AP)), there are 3 other players(non-active players (NAP1, NAP2, NAP3), you have the idol and 3 1/1 creature tokens. Lets look at how this works.
- AP uses Jinxed idol, targeting NAP1 and sacrificing a 1/1 token.
- AP keeps priority and uses Jinxed idol, targeting NAP2 and sacrificing a 1/1 token.
- AP keeps priority and uses Jinxed idol, targeting NAP3 and sacrificing a 1/1 token.
- All players pass priority, the top on the stack resolves and NAP3 controls the idol.
- All players pass priority, the top on the stack resolves and NAP2 controls the idol.
- All players pass priority, the top on the stack resolves and NAP1 controls the idol.
This is fully legal, but a bit complicated and rarely something you'd want to do:
First while the other players NAP2 and NAP3 did control the idol for a few seconds, they don't control it at the beginning of their upkeep so it does nothing to them, only NAP1, if he still controls it when his turn starts, will take any damage from it.
Second you now are down 3 creatures, it will take NAP1 only 1 to give you the idol back - using it only once would still have thrown it to NAP1, and given you 2 more tokens to use however you needed to.
NAP3 or NAP2 could have sacrificed a creature while they had the idol to pass it, but it wouldn't have mattered because the idol would still keep moving in reverse order through the players you targeted with it. In the end it would still be in NAP1's lap - and if they had creatures they were willing to sacrifice they could always pass it on again.
Generally you want to use something like this at the last second - block a creature that doesn't have trample and sacrifice it to the idol since it's going to die anyways or at the end of the turn on the player before you, right before your turn starts and you would take damage. If you have something that gives you benefits when your creatures die like Grave Pact sacrificing tokens like this could be made more useful - but there are better outlets like Ashnod's Altar for that,