As to overpaying for the painting, he wasn't bidding against himself so there was at least one other party who also thought this painting's value was near the final price.
It is also possible that his appearance as a novice might have discouraged some bidders (much to his advantage).
In his photo, he doesn't look drunk or insane...I would guess there was method to his appearance of madness.
Of course there is; now every Picasso in the world increased in value.