After going back through Kreia's life, I can say that she isn't crazy. She knew what she was doing, but she had a few screws loose. You can't really blame her as she's been betrayed by everyone she meets.
Perhaps her cage has been rattled a little. But that only makes her bitter and twisted. Insanity is a point of view after all, Kreia believed in something opposed to what everyone else in the galaxy believed - so she is defined as a few bolts short of a droid. But back in the old days I'm sure they called the guy who said the Earth was round insane as well!