I'm playing for less then 1 month and I really liked the insanity system IN GENERAL. It gave me an early aim for the game: staying alive. But I also think there is a problem:
I - and I think most of newbies - only really learned about lowering madness levels when it was considerable high - 3 levels (the first two I gained letting the char logged in at my base while I read about salem). With low silver, skills, and affluence, my only way to deal with the problem was to use my most valuable item (pickaxe) and mine a lot to find sterling geodes - but I was really afraid that the pickaxe would break. So for a few days I only tried to make and sell things to buy a teddy bear (without success because Popham's market in forums is very slow...)
Luckily a random player begun conversation and eventually offered me some aid with geodes. I don't know if I would be playing without this happening. I already had asked help to 3~4 persons without having any clue of success...
CONCLUSION: Newbies could ignore madness problems until it's too late for a reasonable solution. They really can stop playing even liking all the game aspects. Even teddy bear is not strictly necessary, but a way to poor and mad chars to decrease a madness level IS necessary - even if it requires a considerable effort.