Asylums, or "lunatic houses" as they were colloquially referred to, were a necessary public service in the 19th century. Asylums were created as an institution required by the government to control the uncontrollable; it was mandated that a province have an asylum for the "lunatics" in their midst.

 

Prior to requiring asylums in each province, no specific medical or health care response was proposed for people with mental disorders. They were simply sent to institutions for criminals. That being said, 'insanity' was not considered to be a treatable illness. The aim was to restrain insane people, not to cure them. And the purpose for placing them in asylums were to prevent them from disturbing the public order.​

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In the 19th century, French scientists were developing the concept of mental ‘alienation’ - viewing mental illness as a person’s inability to integrate in society. They argued that this disorientation meant that the only moral thing to do was to isolate them from society as a whole, ​as well as from other groups who were seen as ‘deviant’ and dangerous to society. The lunatic asylum thus became the preferred therapeutic instrument of this moral treatment, secluding mentally ill people from the stresses of mainstream society and family life and incarcerating them in a secluded place, where a strict moral framework was imposed. Physicians aimed to put the mentally sick in a new situation, removed from places, objects, people and circumstances that shaped their usual relationships and behavior.

These asylums were not places you'd want to be contained in. The conditions were inhumane, more akin to how you would treat animals than humans. It was not uncommon to hear of cases of wrongful internment or patient abuse. And with what we now know about elder care and conditions like Alzheimer's and Dementia, isolating the elderly from everything they know and remember can actually lead to further confusion and hysteria. 

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When Gaston is threatening to place Maurice in an asylum as a way to force Belle into marrying him, he is suggesting a fate that could very easily lead to Maurice's death. At the very least, it would prevent Belle from ever seeing him again.