Chronic use of absinthe was believed to produce a syndrome, called absinthism, which was characterized by addiction, hyperexcitability, and hallucinations. This concern over the health effects of absinthe was amplified by the prevailing belief in Lamarckian theories of heredity. Absinthe's association with the bohemian lifestyle also worked to compound fears about its effects, much as has happened with marijuana in America. Absinthe was subsequently banned in many countries in the beginning of the 1900's. This issue is not entirely resolved.
Alcohol is definitely one main component.
However, another candidate is the monoterpene, thujone, which which is considered a convulsant. Thus, thujone would appear to be a good candidate for a second active component in absinthe. Indeed, thujone has long been considered to be the neurotoxic cause of absinthism. However, the direct evidence to support this idea is scant. Therefore, alcohol's effects will limit the amount of thujone one can ingest.