I'm beginning to think he's a genuine mad hatter loony that's managed to hide it JUST well enough that he's seen as mentally fit enough.
I would be careful about attributing a lot of what Trump says to madness, or indeed to Trump himself.
Trump is still fundamentally that little kid from Queens looking at the Manhattan skyline and saying to himself that one day he'll be rich and famous, with lots of big fancy gold things with his name on them and nobody to tell him he has to eat his vegetables. His understanding of wealth is a Richie Rich comic, and he has always had too much of his father's money to realize how gaudy that is.
This childishness bleeds over into his belief in the myth of the executive: that somehow, quite apart from the practical knowledge of how to produce goods and render services and so forth, there exists this special universally applicable executive expertise concerning "how to be successful" -- and furthermore that this elusive expertise is inestimably more valuable than any of the skills possessed by the little people, thereby justifying executive pay. At least part of Trump's vague bluster about "making good deals" and "building very inexpensively" and "winning" is a product of that worldview, and it comes through in everything from his utter lack of understanding of technology (or "the cyber") to his dismissive attitude toward "wonkish details" ("forget the little ****" like a fifth of the economy, Freedom Caucus.) Policy and protocol and knowledge are for the little people. Trump, the executive, need only understand that winning and money are good. Thus how he can run the country like his business, you see.
This makes him hugely vulnerable to manipulation -- you can tell him up is down and he'll believe it without question as long as you appear to buy into his con and call him the smartest winningest winner ever with the best genes and impeccable taste in steaks. Breitbart said he walks on water, and so he welcomes Bannon's leap-off-the-far-right-wing authoritarianism and cyclical history and all the rest of it with open arms. Sessions, by virtue of being the first real live senator to don the red hat, can get Trump to say anything he wants about those darned young thugs running around high on the devil's arugula. Pence, too, was deferential and reverent toward Trump's ill-defined goodness, and so gets a free pass to try to turn America into the Republic of Gilead. Actual executives have an even easier time of it, since kid Trump always looked up to them and never understood why they treat him like a fart in the room. Thus why Goldman Sachs executives run so much of the executive branch now. They're "his", much like "[his] Generals" and the Republicans he thinks he owns by virtue of getting them elected.
The problem with calling Trump insane, then, is that the appearance of insanity, insofar as it is engendered by his fecklessness and mutability, is simply that he sees the world in terms too tribal and abstract to realize when two of his underlings want mutually exclusive things and will happily praise both while letting them, the littler people, fight it out. He will happily take credit for whichever one wins, of course, and act like it was his idea all along, which is what makes him so valuable to extremists. Bannon's crowd (including Miller and Sessions) just wants to bring down "the administrative state" by maximizing chaos, so a buffoon with the memory of a goldfish is perfect; he won't stay bought, so he'll accrue obligations to no effect and maximize dissatisfaction with "the establishment."
Meanwhile, McConnell is facing a donor base that is increasingly refusing to donate to a party that can't repeal Obamacare, a party too used to obstruction to actually agree on policy, and a President whose usefulness to the party in both an electoral and a legislative sense is ambiguous to negative; with Priebus out and the repeal dead, he has neither means nor motive to try to steer Trump in a more conventionally conservative direction. He can read the polls too, and knows full well that pivoting Trump would lose Republicans more alt-righters than they'd gain moderates at this point. That's not a concern for Bannon and only minimally one for Sessions, who simply want to get as much as possible out of Trump before the whole thing collapses. They know how unlikely they are to see his like again, and so are thinking on time scales shorter than an election cycle.
Imagine politicians as point masses: small, dense things that move according to the sum of the forces acting upon them. Trump is simply a particularly light one, and therefore sensitive to a lot more wobble than someone with more ideological inertia -- and for the forseeable future, all the people pulling on him are yanking him towards crazy. Thus, towards crazy he goes, but let's not forget that some of those people will still be there if he should leave or be removed. Left to his own devices, Trump would be golfing all day, holding rallies, and signing whatever Ivanka and Jared say he should; the forces that move him in authoritarian, regressive, and/or insane ways are external to him and need not leave with him.