Dany & Jon are simultaneously in love, related, and at war for the rightful claim to the Iron Throne; and on top of all that, Dany just snapped and burned innocent people to death, en masse, in front of Jon - one of the most honorable people in the Seven Kingdoms. Now that’s just one of the many threads spun in this episode, but compare even that single instance of character-based, nuanced conflict to the most interesting thing we could get from the battle with the Night King & the wights, which is what? That Bran is actually the Night King, who has come from the future to unite the Seven Kingdoms or something? Or that people we’ve grown to care for die to a faceless, uncaring army? There are serious flaws with the pacing and specifics here, but this is the right final conflict to conclude this story, no doubt about it. And I think GRRM’s ending will eventually prove that to be true.
Also, how else would Dany be able to hold the Throne without ruling by fear? She no longer has a legitimate claim, her closest advisors are either disloyal or dubiously loyal, the people of King’s Landing and The North have no love for her and the rest of the realm barely knows of her aside from rumors. Not to mention that her ultimate super weapons, her dragons, were shown (very publicly) to be fallible by Euron’s magic BS javelins. She has to either rule with an iron fist, or lose everything she’s spent her whole life building toward. And that’s ignoring her fragile, hopeless mental state wherein she’s now essentially alone in a foreign land. Her snap makes perfect sense. It’s not about literal “madness.”