Saying that everyone and anyone that is CN or CE is insane makes the alignments useless and leaves out the majority of personality types that would qualify for those alignments. I view options for someone being chaotic as someone who believes in personal freedoms, ignores law, does not automatically obey or respect someone simply because of their title or position of authority as chaotic. They may value anarchy over structure, a lot of people do. Perfidia from One Battle After Another is chaotic - whether she's good, evil or in-between is a matter of opinion (and an oversimplification) but I don't think she's insane.
No edition has a CE write-up that doesn't involve insanity. I've seen no CE examples in media that don't involve being off your rocker in some way.
I think the best take on alignment was in the 3e books where they actually spend a couple of pages talking about what it means, what you describe is either chaotic insane* or chaotic stupid which makes it pointless. People of every alignment can be insane. Unless of course you're extremely lawful and believe anyone that doesn't think in a proscribed manner is insane which would be a very LN way of looking at the world.
This is 3e's take on CE.
"Chaotic Evil, “Destroyer”: A chaotic evil character
does whatever his greed, hatred, and lust for destruction drive him to do.
He is hot-tempered, vicious, arbitrarily violent, and unpredictable. If he is simply out for whatever he can get, he is ruthless and brutal. If he is committed to the spread of evil and chaos, he is even worse. Thankfully, his plans are haphazard, and any groups he joins or forms are poorly organized. Typically, chaotic evil people can be made to work together only by force, and their leader lasts only as long as he can thwart attempts to topple or assassinate him."
*Also someone no one would want in their party. It's a very 2e take on CN - someone that follows the "You might switch sides in the middle of battle to see what happens" will soon find out that what happens is that they're no longer part of the group. It was a dumb take on the complexity of people's outlook and motivations then and it still is IMO.
I think AD&D's CN is dysfunctional. It goes past insane. As for 3e's CN, first and foremost they follow their whims. Whims are done without thought. As an individualist first and last, while a CN person doesn't intentionally go after organizations or deprive others of liberty, if the whim strikes, they wouldn't hesitate to deprive someone of their freedom.
If your entire outlook on life involves following whims, you aren't a rational person. The types of insanity that result in CN rather than CE aren't going to be as destructive generally, but they aren't always going to be benign, either.