MKULTRA came out of popular fears on the power of "brainwashing" that circulated around the time of the Korean War, and out of psychological research into pharmacological substances and behavior modification. All of these were pretty mainstream ideas at the time.

Would the average person believe that the CIA would fund a lot of unethical research at the time? Probably not — because the CIA did not have an extensive known history at that point, so there wouldn't have been reason to suspect that sort of thing.

Which makes it a difficult question to really grapple. Would anyone have suspected the CIA of doing the things it did in the 1950s that we learned the CIA did in the 1970s? Well, probably not, because almost nobody knew much if anything about the CIA in the 1950s.

There is nothing exceptionally impractical or over-complicated about MK-ULTRA, as an aside. They funneled money into projects that seemed interesting, sometimes with the knowledge of the recipient that they were doing CIA work, something through front organizations. That's not impractical or over-complicated, it's just a form of secret research, and by the 1950s the US had engaged in secret research for a long time. It just happened to be unusually unethical research. As for "borderline sci-fi" — they were doing psychological experiments on people without recourse to ethics. That's not science fiction, that's just science being applied unethically.

My favorite book on this stuff is Rebecca Lemov's World as Laboratory: Experiments with Mice, Mazes, and Men, esp. the chapter "The Impossible Experiment." Lemov contextualizes this research within a lot of other psychological work at the time.