Yes, he did, because he was one of the few people to both see that the whole thing was a crock, and act on it.
Yes, seeing “that the whole thing was a crock” was not that difficult, many people saw that. He was one of the few who understood how to exploit the loophole and gathered enough capital and had the wherewithal to invest in the instruments which would do the most damage and maximize the profit when the stinking crock eventually broke.
Many people went bust trying to act on it too early, either using too short term contracts, or without enough capital and having to cut losses. Paulson himself started getting into CDS since 2005, when they were extremely cheap.