I tend to support the use of "insane" and "crazy" to mean "severely and systematically irrational", because there are some common points with actual mental illness that makes the analogy reasonable, and the connotations can be desirable. But if you're trying to create a neutral word so that you can put more connotations of badness, irrationality, and irreversibility into "insane", you're going to seriously distort your view of literal insanity. Literal-insane people have lots of experience at basic skepticism, so that's a strong protection against ending up colloquial-insane if you don't fail right at the start. And when you say insanity should be eradicated and use comparisons to vermin, you're saying that you want to take away my pretty hallucinations, and you're begging a reader who doesn't understand the horns effect very well to replace "insanity" with "insane people".
If you want a cutesy word for little problems that aren't so bad, maybe start using "insane" and pick something like "stupid" for the more severe version. Or at least pick something unrelated enough that "insane" will keep sounding like "having reasoning flaws that impair rationality" rather than "so fucked up, man, don't even try".
Edit :Excellent suggestions in the comments. Two of them stood out for me:
We often use "insane" to describe people whose behaviour or beliefs are below the sanity waterline. But as most must would agree here, you cannot call someone insane with a straight face just because he happens to believe in magic.
I'm currently watching Future by Design, a documentary featuring Jacque Fresco and the Venus Project. Jacque came up with this word, "unsane", to describe people who basically, aren't rational because they haven't been exposed to the right ideas yet. Which would be different from "insane", which is more about irrevocably irrational people.
I like this word, because there isn't the tone of accusation we find in "insane". This neutrality makes it easier to say that we can do something about it. Insanity should be eradicated like vermin. Unsanty on the other hand can be fixed.
So, do you think this word, "Unsanity" might be worth using?