It is the same as if everyone's forever permanently rich, no one will continue to work and be productive.
If everyone is permanently happy, no one has to feel sadness and conflicts anymore. That will not give people growth and learning. since everything will be perfect, nothing will be wrong. simple math.
I know Madara's dream of peace and happiness. And it's not evil. It's just a twisted concept of peace, different from what Naruto, and the whole shinobi population have.
Madara's way of obtaining it also doesn't take into account everyone's stand. He just wants it for his own. He is blinded by his much desire for peace, that he thinks he's doing it for everyone, to be permanently happy in a dream world, an illusion, when he is actually doing it because he experienced loss, defeat making him see things the way he sees them now.