I don't know about "sick" and/or "delusional, because psychologically this pattern fits within the normal realm of human behavior. In other words, this hypothesis wouldn't be an overt psychosis from Gary Kubiak - merely a microcosm of what we've all experienced from time to time, only, in this case, commiserate to a higher level of public scrutiny.
I've been saying this for years that Kubiak's backup QB mentality has been hurting this team via Matt Schaub. So, I think your point is extremely valid.
To that end, Gary has the capability to get it done, and probably lead this team to a Super Bowl, but only if he can somehow acquire a QB that doesn't fit his mold - to get out of Gary's comfort zone - someone that Gary can only shape so much, in all the right ways. Instead, this yet-to-be-named young QB negates the need for Gary to infuse his own shortcomings into him, because he's more talented than Gary ever was.
I think Gary could except that. It's just that he made a good call with Schuab, had initial success, but like Robert Zimmerman, "The Times They Are a-Changin'." Whether Gary adapts or not is a different story. If he can, he should be golden. If not, he's done.