Plenty of people behind those screens see 'insane' characters as unusual and rare - which they totally aren't nowadays. LOTS of people have insane characters for that very same reason, which in turn makes said reason worth nothing and- Yeah.
I, to be fair, have encountered people who can RP the blanket term 'insanity' in an original and entertaining way, thumbs up there! Schizophrenia, Bipolar and other mental diseases, diseases with a DEFINITION, seem to be much more effective than an 'insane' character. At least from an observer's point of view, anyway - people have guidelines, so to speak, to base their character's behaviour off.