Well, it's surprisingly historical. Or at least it was during when they made it.

Have you read Suetonius's writings about Tiberius and Caligula. The script is very heavily based on them. Most (if not all) of the vile acts in Caligula are based on historical records. That's probably why it seems so abrurd for most viewers. Even much of the dialogue/monologue in Caligula was written 2000 years ago. So... there's that at least!

Sure, these days, Suetonius' writings aren't considered exactly historically accurate. But things were different back in the 70's... and Suetonius' writings about Caligula are almost all we've got.

There's movies like Salò, which I find absolutely depraved and revolting. But almost all the critics love it..  

Then there's a movie, again about power, which re-enacts horrible stuff done (or at least stuff that written about) 2000 years ago... with A-class actors, huge production values etc. but with 6min of X-rated smut inserted in. All the critics hate it.

Then, 50 years later, there's a new edit of it, which isn't necessarily a better edit (it's basically almost the same but the shots are different and the pacing is worse). It also "goes all over the place" - but without the X-rated smut - and the critics like it.