Nope, they're not mad... In fact, they're one of the better run airlines that I've encountered, and I have had dealing with them behind the scenes as well as being a passenger of theirs on occasions. And its got nothing to do with oil either...
A lot of EK
's longer operations are in the six-seven hour range, to Europe and the like, or into Africa. That means an A330 or 777 can't do more than one round trip a day, but even allowing for a longish turn down-line it will still have a fair amount of free time at home base. Its cheaper to run an A330 on a one hour sector when it would otherwise be doing nothing, than it is to buy a dedicated short haul fleet. [This is much the same as why Cathay Pacific sometimes schedule 747-400s on the one and a half hour Hong Kong-Teipei service - yes, its a very busy route, but it also keeps a 747 busy that would otherwise be sat in Hong Kong and reduces the number of regional airplanes they need]
Furthermore, using the A330 gives them flexibility to accommodate more passengers at peak periods (early/late and at peak travel periods), and it also gives them much more operational flexibility if they have tech problems than they would get from a small but dedicated short haul/narrow body fleet. Finally, they save through fleet commonality and reduced spares inventory, as well as on licencing and training costs (flight deck, engineers, cabin, etc) as they have to support fewer aircraft types.
Like I said at the top, I've found EK
to be a pretty switched on airline and whilst they [arguably] may not have the funding problems of some other carriers, they certainly don't in my experience aren't mad.