The ACLU, psychiatrists, and other reformers are more culpable than Reagan. Deinstitutionalization started long before 1980. See, e.g.,

  https://www.nytimes.com/1984/10/30/science/how-release-of-mental-patients-began.html

Some amount of reform was needed, but the deinstitutionalization that occurred was too extreme, too rapid, and lacked adequate backstops. Politicians were just doing what they were told by lawyers and psychiatrists, and they were eager to comply because it meant huge cuts in spending.