He's not crazy, he's passionate about his cause, and whether you agree with him or not that passion has led to a lot of good. On the other hand advocating that someone should be "institutionalized" because you happen to disagree with their opinion is going quite a bit farther than Stallman goes.
How about reading some of what he writes instead of brushing off his ideals? His assertion of proprietary software being "evil" for some very specific values of "evil" are quite valid.
Only fools that don't read his work brush him off so easily; otherwise they'd refute his positions with real arguments.