you know follies (IE pretend ancient ruins built by 18/19th century english aristocrats, to make their estate seem more ancient), did they actually have the desired effect at the the time, or did people back then find the idea just as silly and vain as we do?

The clue may be in the name. Folly of course means:

lack of good sense or normal prudence and foresight

I can speak for one example, which is McCaig's Tower or McCaig's Folly in the harbor town of Oban, Scotland. A wealthy Scottish banker, a Mr John Stuart McCaig, had commissioned a Colosseum-like structure ('an artistic tower') to incorporate an art gallery, a museum, and statues of himself and his relatives (including babies dead in childbirth!) atop Battery Hill in Oban. Unfinished at the time of his death in 1902, McCaig used his will to create a trust to finish it, as well as to build similar towers and statues at prominent points on his other properties throughout Scotland, 'to encourage young and rising artists' and to provide the masons of Oban with employment. This, of course, had the effect of disinheriting his next of kin, his sister Catherine who would otherwise have inherited his entire estate. Scots law makes it rather hard to disinherit your relatives; at the time the only way it could be done was by naming another more worthy use of the money, such as a 'charitable purpose'. Catherine, naturally, sued to have McCaig's directions in respect of the towers set aside, A great deal of litigation arose from the case. In McCaig v University of Glasgow No. 2^1, the Lord Justice Clerk, Lord Kingsburgh, said:

Now, what was it that Mr M'Caig expressed in the deed? What was his desire and intention? He seems to have been possessed of an inordinate vanity as regards himself and his relatives, so extreme as to amount almost to a moral disease...That was the only real purpose to be served by the establishment of the trust. It was no gift to anyone. It was solely a scheme for setting up so much stone building and statuary, and nothing else. Up to this point therefore there was no beneficiary for whom he disinherited his heir. It could hardly be held that these towers and statues could be a benefit to Oban, although I do not doubt that he thought so, but certainly no beneficial enjoyment could result to anyone.

After Catherine died, McCaig's Folly again came up in court, in McCaig's Trustees v Kirk-Session of the United Free Church of Lismore^2. In this, their Lordships again held that:

The expenditure of this large sum on statues, which was directed apparently from motives of personal and family vanity, will serve no purpose, all the less seeing that the family has virtually become extinct. It can be of no benefit to the public, because the enclosure in which the statues are to be erected is one to which they will have no right of access.

He continued:

I am prepared to hold that the bequest is contrary to public policy on more than one ground. In the first place, I think it is so because it involves a sheer waste of money, and not the less so that the expenditure would give employment to a number of sculptors and workmen, for it must be assumed that their labour could be usefully employed in other ways. I think, further, that it would be a dangerous thing to support a bequest of this kind which can only gratify the vanity of testators^3 ...A man may, of course, do with his money what he pleases while he is alive, but he is generally restrained from wasteful expenditure by a desire to enjoy his property, or to accumulate it, during his lifetime. The actings of the two M'Caigs form an excellent illustration of this principle of human conduct. For many years they had apparently contemplated the erection of similar statues, but they could not bring themselves to part with the money during their own lifetimes. Such considerations do not restrain extravagance or eccentricity in testamentary dispositions, on which there is no check except by the Courts of law...The prospect of Scotland being dotted with monuments to obscure persons who happened to have amassed a sufficiency of means, and cumbered with trusts for the purpose of maintaining these monuments in all time coming, appears to me to be little less than appalling.

The case summary in the 1915 edition of Session Cases is more succinct:

Held that, in respect of their unreasonable, extravagant, and useless character, the directions were invalid and could not receive effect.

This suggests that there was at least some recognition that these were vain and pointless, since the courts did not see a public policy justification in allowing McCaig to use his wealth posthumously to create more. On the other hand, McCaig's planned monuments were particularly extravagant and stupid even by the low standards of the multi-century follies craze in Scotland. Interestingly, however, English law at the time would not allow a testator to bequeath money for the upkeep of their own tomb or tombstone, but would allow them to bequeath it for the upkeep of the churchyard in which they were situated.

So I think, on the basis of the McCaig cases, that these were indeed considered silly and vain at least by some. Certainly, it was recognized that they were not of any practical use.

McCaig's tower, unfinished as it was at the time of his death, still looks down on Oban harbor. The cases that arose from McCaig's will still form a prominent part of the Scots law of succession, authority for the proposition that trust purposes may be set aside on the grounds of uselessness.

^1. 1907 SC 231
^2. 1915 SC 426
^3. A term meaning the makers of wills.