To be fair that's mostly a case of "even a broken clock is right twice a day". Psychology was still in its infancy back then and they had so few ideas how to actually help people that insulin shock therapy and lobotomy seemed like good ideas. When looking at it with modern knowledge it's easy to say they already knew when pointing at the bits of decent ideas back then. In reality that's cherry picking between the heaps of wrong and outright dangerous ideas prevalent at the time.