Mikewil, in answer to your question, neither option you put forward would be acceptable to me, either in sensibility or safety.
Unfortunately we live in a world where a pilot is a profession like any other, the guys/girls flying passenger jets need to put food on the table and pay their mortgage just like anyone else.
While you think it is unsafe or not sensible, there are many instances where a pilot 'shouldn't' fly but still will for the reasons I have outlined above. Sleepless nights & headaches are probably good reasons not to fly an aeroplane, but I am guessing the vast majority of pilots will still show up to work.
Likewise, if a pilot suffers from a mental illness such as depression he or she is likely to consider that the bills still need to be paid prior to saying "I'm depressed so I can no longer fly" and subsequently join the unemployment queue.
Depression is often something that often only lasts a year or two and when adequately treated with medication, would make for a much safer pilot than one who chooses not to get help and suffer in silence for fear of losing his aviation medical.