Flynn is a nutcase, but he's not that much of an anomaly compared to the rest of the people Trump is giving positions to. Sessions, Guiliani, Gingrich; all of these people are utterly insane and unfit to serve, or continue to serve in positions of government. Flynn is especially dangers, though, considering the position to which he is being appointed.
Michael Flynn is so far a big disruption and I'm not seeing much support for his appointment. He's maybe the only one with any foreign policy experience, but he's also a conspiracy nut who's anti-Muslim and has taken money from Russian organizations and done some dubious lobbying work for Turkey. This doesn't speak well of his objectivity or even his commitment to the US. So he should step down.
Whatever his merits leading JSOC - and by all accounts he was a competent and diligent commander - Michael Flynn's public statements have demonstrated a dangerous, paranoid view of the world in which facile applications of American "strength" trump (no pun intended) careful and nuanced analysis. His sweeping generalizations about Islam threaten to undermine American standing in the Middle East, his unrelenting bellicosity is sure to alienate American allies, and his over-hyping of the terrorist threat will encourage fringe demagogues at home. He has no place in the White House and should step down before he does real damage.
Trump receives national security briefings each day. He knows more than the average person does about national security. People elected him for his judgment. Trump should make the decision as to whether to leave Flynn as a National Security Advisor or not. He might do things for Trump that he values. It is up to him.