I'm not sure it demonstrates complete stupidity. If I'm sitting where they are (heaven help me), losing this seat would add so much credibility to the CW that the wheels are coming off the GOP. The NRCC, for future fundraising efforts, cannot lose this seat. From their standpoint, this is a firewall. They are really in a pathetic situation.
I agree that losing this seat would be a disaster for the GOP. I'm not sure that dumping even more money on ads for Oberweis will help anything. They should have saved their money for a candidate how could actually benefit from extra air time.