To me it seems rather tiny for Moriarty to be one of the few continuing characters we've seen. It's true that television strongly favors personal viewpoints, and for most people the emotionally significant parts of life center on a rather small number of characters. But there really is an appeal to drma that is set in a larger world. However flambuoyant the enlarged characters, however convoluted their recomplicated interrelationships, there is still a flavor of narccissism that can make such typical ("make it personl" is the hack's cliche) offerings not just monotonous, but distasteful.
Also, odd as it may seem, I thought that Sherlock was imagining/hallucinating Adler's appearance, that Watson did not see her and was alarmed at Holmes' reaction. It is entirely possible for someone to see a dead loved one without being psychotic. As in so much, there is a continuum between normal consciousness and full blown psychosis.