In my mind there are no inherently bad approaches to insane and/or ludicrous settings. It can work if you take it very very seriously (Nolan's Batman) or you can go the completely different path of having fun with how stupid your original premise is (Not sure about any good examples, perhaps Deadpool or movies like Scott Pilgrim) or you can have anything in between like Marvel movies. The approach is not the problem.
A movie or story is bad because it is written badly, not because they did not make it the appropriate amount of realistic or unrealistic. My favorite story is filled with giant lizard people with swords for hands that build giant floating fortresses in the sky that shoots lasers, a girl that defeats a magical creatures through the power of rap and a 400 000 year old dark-elfish dude with a sword that traps you in an alternate dimension where you must pull on a cart forever-more to escape Chaos. It also has pages upon pages of philosophy, dealing with death, the weight of history and the importance of compassion. Nothing can be taken too seriously and everything can be made fun of.
A movie or story is bad because it is written badly, not because they did not make it the appropriate amount of realistic or unrealistic. My favorite story is filled with giant lizard people with swords for hands that build giant floating fortresses in the sky that shoots lasers, a girl that defeats a magical creatures through the power of rap and a 400 000 year old dark-elfish dude with a sword that traps you in an alternate dimension where you must pull on a cart forever-more to escape Chaos. It also has pages upon pages of philosophy, dealing with death, the weight of history and the importance of compassion. Nothing can be taken too seriously and everything can be made fun of.