The truth is that we don't know enough about the specifics regarding the justu to really understand if its truly a good idea or not. For example, how does madara deal with people dehydrating and dieing? -possibly with manipulating time perception or controlling peoples bodies making them eat/drink while their "minds" are in a illusion. The idea isnot bad, if someone in real life could do what madara wants to, he would be the worlds first trillionare. The problem isnot the idea, its with Madara. The way Madara explained it to Obito was that he is going to bring everybody into a illusionary world that he controls. ( as opposed to the previous theory that everyobody gets their own perfect reality) This is where the problem is, does Madara's perfect world mean everybody is happy, or just him? Would most people be happy in madara's reality?? In this case Madara is god, and the problem the shinobi world has a lack of faith and trust. It's similar to how a devout christion truly becomes sad when someone dies even though that individual is (supposedly probably in heaven) Most likely, the reason is that a small part of the devout christion questions if his/her loved one is really in heaven. Similarly, the shinobi world doesnot trust Madara with their futures.
If someone like Itachi or Minato --(Jiriaya's perfect reality would be my favorite-giggedy) came up with Infinite Tsukuyomi I'm sure more people would be for it.