Is Insanity a Disease or Simply a State of Mind?

After reading The Yellow Wallpaper I was thinking about mental illnesses. Who decides what is classified as insanity. I think that a lot of things, like ADD, BPD and ADHD are conditions that are often overdiagnosed. I think that doctors see kids who have a little too much energy, or a rebellious spirit, and immediately want to pump them full of drugs that will mellow them out. It's not that I don't believe that these conditions exist, I just think the statistics prtraying how many kids get them are greatly overexaggerated due to doctors' eagerness to provide a 'curable' diagnosis. In the Yellow Wallpaper completely agreed with the assumption that the narrator went bonkers. She obviously had inadequate medical care, and it was nobody's fault, what was wrong with her would not have been recognized by physicians from her time. It just makes me wonder at how we got from 'she's overexhausted and needs to stay in bed for 3 months' to 'we don't know why but she's hyperactive so lets give her some meds that will induce a hazy, slow existence and you can take her home after we fill the prescription.' It also kind of scares me that the narrator might not have been better off getting modern treatment, that she would have been just as unhappy as she was in that yellow room.