Oh, I'm sure Putin is not actually crazy.
I'm not at all sure he hasn't gotten lost in the maze of propaganda a rubber legislation he has created, and may have started finding it difficult getting useful, actionable information about what's really going on, and the significance of things. Possibly because other key people around it might be equally challenged when it comes to discerning what they would like situations to be, and what they actually are. They've all been cooking the books for rather a long time, and with other political leaders of various hues engaged in putting a preferential spin on things, the longer you keep at it, the more things as they really are seem to recede.
That's at least what I've been implying when surmising that Putin might have "lost his touch".