The theme of Season 8 isn’t actually “Daenerys is insane”, though I can see why some may initially think that.
The potential for darkness has to be there, so it’s even more impactful when she doesn’t take that route. Showing a possible path of destruction and madness greatens the impact of an inevitable hero moment later on.
In the first two episodes of Season 8, we’ve seen that her guard is up quite a bit. She feels rejected, disrespected, and isolated from all these characters that have such deep histories with each other. Even the characters that are on her side, like Tyrion and Theon, have stronger relationships with other characters who aren’t necessarily 100% on her side, like Jaime and Sansa.
The story that’s being told is not one of a power-hungry Queen descending into madness. It’s the story of a girl who was exiled and told that her destiny was to return “home” and reclaim her birthright… and it was all based on a lie and secret that’s finally been revealed. If Rhaegar and Lyanna’s marriage had been accepted (even though he was already married to Elia Martel), Daenerys would have led a very different life.
Aside from her friends and advisors, Daenerys has felt noticeably isolated and out of place in Westeros, especially this season. The Iron Throne has been this far-off, endgame dream that she was raised to embrace since birth, and did so believing she was born for it. So her reaction to Jon Snow’s parentage reveal is completely reasonable. (Remember that them being related is irrelevant to her. She doesn’t care.)
I think there’s some favoritism in play when it comes to scenes like this between Jon and Daenerys. There were similar reactions when she went head to head with him during their first meeting. A woman asserting her power and desire to rule against a man is inherently uncomfortable for some viewers, and it shows during scenes like this one.
Her reaction doesn’t show signs of a woman descending into madness. It’s the reaction of a woman whose entire existence has turned out to be a lie and been thrown upside down in the course of one conversation.
She came to Westeros to reclaim the Iron Throne in her family name. And now she’s fighting a huge battle with people who don’t even want her there. She’s risking her life, her army, and her dragons (one of which she’s already lost). And now she finds out that a secret Targaryen, who happens to be the man she loves, can just sweep her claim and lifelong goal right from under her. Her reaction is very, very justified.
Another facet of this reveal, that a lot of people are ignoring, is that Jon Snow is the only other surviving Targaryen, and Daenerys believes she can’t have children. So to continue the line and save House Targaryen, Dany believes he would have to marry and have a family with someone else.
“We’re up for the same promotion and I’ve been working for it for my entire existence. This is my whole existence. Since birth! Dany literally was brought into this world going: RUN!” -Emilia Clarke for Entertainment Weekly
Daenerys and her dreams are shifting focus now that she’s actually in Westeros… and found Jon Snow.
Daenerys is slowly realizing that the Iron Throne may not be what she actually wants or needs. For now, it’s still what she outwardly and consciously wants, but deep down she’s starting to realize that the Iron Throne may not be her true destiny. Jon’s parentage is a literal slap in the face, pushing her further to that realization. She’s probably thinking “WTF, I’ve fought my entire life for something I thought I was destined for, but it was all lie? Now what?”
This is the story of someone focusing on a dream so hard and so passionately, that they don’t even consider that it may not be what they actually want. That’s not to say she’ll immediately give up her quest for the throne and this lifelong dream. But I believe, in the end, after facing the perilous battle against the White Walkers and losing people she loves, she’ll realize that the Iron Throne isn’t what she covets, and it may not be her true destiny after all.
You can actually see this shift beginning to form in 8×01 when she turns to Jon Snow and posits what would happen if they just “stayed here for 1000 years”. It’s definitely a callback to Jon’s past lover, Ygritte, asking a similar question in their cave. But it has another purpose too. In that moment, with the man she loves, the Iron Throne is a mere footnote for Daenerys.
So what is Daenerys’ fate?
Here are a few of my theories…
Her destiny may be to save mankind by sacrificing herself to form Lightbringer. Or maybe she’ll survive and still rule, but eliminate the Iron Throne altogether and return Westeros to 7 different kingdoms, aligned but independent. Or maybe she’ll give up ruling altogether and settle for a quiet life, a family, and a house with a red door.