If you've ever been in an emergency department, you'll know that it's far from ideal if you're experiencing an acute mental health crisis. EDs are often noisy, chaotic, and aren't equipped to provide the continuity of care and supervision that acutely mentally ill patients need.
A PICU isn't all that radical in concept; a service broadly similar to an inpatient psychiatric unit, but tailored to provide rapid access to short-term crisis care for the most acutely ill patients, as a stepping stone towards either a longer-term inpatient admission or discharge into community care. It's a very useful service that provides a much better alternative to ED admissions, but it's only part of a well-functioning mental healthcare system. If you don't have good community care services, you're just creating a revolving door.
The vast majority of people living with severe and enduring mental illness can live successfully and independently in the community, but they need a solid base of support from a multidisciplinary team to establish a stable and health-promoting life. It's not rocket science, but you do need joined-up care to support all aspects of wellbeing - medical care, substance abuse treatment where applicable, but also support with housing, work and community integration.
That kind of wraparound support obviously doesn't come cheap, but it's a heck of a lot cheaper than either locking people up in long-term institutional care or just patching up their most acute problems and sending them back out on the street.