Adam controls the majority of voting right to the company and the board (made up of VCs) doesn't want a messy legal fight since they stand to lose money if We tanks. So a moderate amount of graft is tolerated since the alternative is less desirable.
This alone should be a massive turn-off for investors, nevermind this kind of personal eccentricity that makes this absolutely insane.
Which situation you are in, and whether shareholders would be turned off by majority ownership, is context specific.
For example, I think SpaceX would be a less attractive stock if there were only minority stockholders, and having Elon as the majority holder makes it more likely to succeed at going interplanetary, rather than just milking a traditional orbital business model.
If your investment thesis depends on a bold bet like that, a single majority shareholder you trust would be a comfort.
I agree with your larger point though.