Sisko, who just two weeks ago was absolutely determined to stop the forces of evil and protect Bajor, suddenly recants on that and considers retiring. The Prophets don't want him to because they have future plans for him, so they send him a vision of a guy that is so put-upon by racism that he has a mental breakdown and is committed. This convinces Sisko to continue the good fight for some reason or other. A story with the gravity of the Benny Russell story needed to mean something more than what we are presented with here. What obviously happened in was that the writers wanted to tell Benny Russell's story, so they conjured up a problem out of nowhere and used the Benny Russell story to fix it. In some ways all storytelling is like this, it's just not always this obvious.
Given all that's happened to the guy in recent years, I can see Sisko developing a sort of bi-polar condition where he's fine one day, then the stress of everything sends him into a sulk.