After some deep thought, I feel I can provide a more developed opinion on the question posed in the title of the thread.
The world has not 'gone mad', this virus has simply highlighted one of the key issues with today's modern society.
As a species, throughout history we have always had a fear of death and mortality. . We have been conditioned as a species through psychological evolution to fear death and to not think about it until the time is near, when we are finally forced to accept the eventual end to life that we face as mortal human beings. As society has developed throughout the centuries, society in general has deemed death as 'the worst possible thing ever'. Death has for centuries been used as the main deterrent to try and prevent people from doing things deemed by those in power as 'wrong' or 'unacceptable' through capital punishment. For centuries one of the things we have worked hardest on and devoted the most time to are those which prevent or delay death, this includes permanently locking away or even executing those who may cause someone to die and developing vaccines and medicines to try and slow down or prevent death from occurring through diseases prematurely. This is, in my opinion, a very positive fact for the most part, however it has some perhaps lesser known societal impacts.
Due to the fact that, essentially throughout history death has been our main enemy as a species, we have been conditioned to think that it is the worst possible outcome in life, and must be avoided at all costs. This is, for the most part a good thing as it allows us to live a long life without worrying about whether we'll die from a disease or get killed around the corner. However, what has happened here has highlighted one thing to us (or at least those of us that are able to take a step back and look at the wider picture), we have become so afraid of death, that it completely diminishes our perception of other risks and aspects of society. This pandemic has perfectly highlighted this fact. As soon as a virus that might cause preventable deaths, we as a species are programmed to immediately intervene as this has, in the culture and society we have developed, been conditioned as the 'right' thing to do. This is essentially what has happened here, and we have stopped almost all aspects of society to combat the one thing in society we are collectively all programmed to fear. This is arguably human nature, and this motivation to intervene and stop any preventable deaths from occurring has, throughout history, created some fantastic work. As a species we have created vaccines, medicines and healthcare systems dedicated to this cause, and this has allowed us to extend our life expectancy to avoid the one thing we as a species fear most for as long as possible. This psychological conditioning has however, in this situation, had an previously unseen side effect. Our fear of death has grown so great, it has blinded us to any other damage that may impact the society we have constructed or that may impact anything else in our lives.
Nations across the world have 'locked down' in order to save lives and stop any preventable deaths from occurring through this virus. This has been with good intent to save lives and follows the instincts of the human species. However, we are now at a point where we are starting to see the problems of being so 'afraid' of death as a society. We are now at a point where, in order to allow society to continue to function and to allow for the best outcome for the greatest majority (my beliefs are mostly utilitarian as you can probably tell), we now have to do the one thing that throughout history we have been conditioned to never do. We need to accept death, and that in order for us to continue as a functional society, we are going to have to allow some preventable deaths to occur. The issue with this situation is that modern human culture, which is essentially a product of historical and social beliefs, deems allowing any preventable deaths as 'wrong', so we are now at a point where we either do the 'right' thing and actually hinder the development (benefitting the minority, hindering the majority) of the society we have constructed due to a historical belief, or we do the 'wrong' thing and we allow us as a species to continue developing and shaping the society we live in (benefitting the majority, hindering the small minority). In my personal opinion, it would be better to accept that there will be some preventable deaths and that this is a small price to pay to allow our species to continue living in a functional society. If we do not accept this, then we face the situation that until we are able to prevent the preventable deaths through other means, society will be paused, freedoms restricted, and livelihoods (another construct of society) will be lost. It seems that our government, alongside many others in the world, are afraid to admit that we will have to accept preventable deaths, and understandably so as it goes against our psychological construct as a species, however it is, in my opinion for the greater good and the sooner we are able to accept that this is a unique situation and that, whilst it is extremely sad we will lose people to this virus, it's not worth sacrificing the economy, the education of our children, our livelihoods, our mental wellbeing, our freedoms, and many more aspects of our current society.
Inevitably, if we do not want to stay in this societal limbo until we obtain a vaccination for this virus, we have no choice but to accept that a small number of preventable deaths will occur, and that this is, whilst very sad, a necessary fact to face in order to benefit the vast majority and to prevent many aspects of our current society, including the economy and our level of education (school/unis closing) from being lost due to not being willing to expose a very small number of those in society to the one thing that as a species we are conditioned to fear most.