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Genuine question: Has this strategy ever worked? When has economic stress imposed by a competing power turned a populace from being supportive or apathetic to their government waging a military campaign(against an external target or even against an internal target, either in a genuine conflict or a genocide) to them overthrowing it?

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Economic pressure hastened the fall of Soviet domination. If you believe Regan, it was the primary cause. It you don't (and you shouldn't), it was a contributing cause.

I'm not commenting on the broader topic; just that this strategy has worked before.

Sanctions played a major role in forcing Apartheid South Africa to the negotiating table regarding its military actions in Angola, giving Namibia independence, and starting negotiations with the ANC and other groups to end Apartheid. They were bankrupting the regime and white South African businesses were increasingly applying pressure on the government to find a solution as the economy crumbled.

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