I guess part of why people find these discussions so interesting is the fact that there are so many different angles one can take, and still sound logical and "correct".
(I mean, from a purely practical standpoint - it's probably among the bigger wastes of time we could engage in discussing. What are the chances I'll ever personally have such a financial windfall? I barely ever even play the lottery. Pretty sure I'm not alone in that realization.)
Regarding Notch spending all that money on a huge, fancy home though? It's funny, because I've met several older and very wealthy people in the past who advised me that a big house is *exactly* where I'd want to put a big chunk of my money, if I was in that situation. Your argument against doing so makes lots of sense to me. But at the same time? A home is normally the single biggest item a person spends their income on, and with good reason. Whenever you're not at work (and even then if you work from home), you're probably living in your house if you're not out running errands or doing something for entertainment. Your garage or carport on your home serves as some protection and a parking space for your vehicle(s) too. And the land around your house might be used for such things as growing a garden or other hobby activities. In other words, you get a lot out of the purchase. Most other things you buy depreciate rapidly. Even if you spend money keeping them looking like they're brand new "out of the box"? Their resale value plummets as the years go by. With a house, not so much. You *might* wind up with a poor resale value, but that depends largely on factors you have some control over when making the initial purchase (such as the location and what's trending around it). Choose location wisely, and chances are quite good your house will fetch at least enough on the open market to keep up with inflation, no matter how long you live in it first.
IMO, Notch is a somewhat unique individual anyway, in that he's very introverted and quite possibly suffers from at least a mild form of Asperger's. I think your typical coder/developer who found him/herself in his situation with a property like Minecraft would have simply been driven to keep building the product and adding onto it, as its popularity soared. Most of us know, deep down inside, that we probably only get a few chances (at most!) to do something in life that really has an impact and matters to a large number of people. Many people with kids would say their offspring counted as one of those opportunities. But otherwise? Most of us just hope to work for a company on some sort of project that has importance, so we can say we were "part of it". It's rare to embark on a project by oneself that achieves that level of notoriety. I have a feeling Notch's misery is mostly self-inflicted, and doesn't *really* have a lot to do with the fact he attained wealth.