Let us look at this policy in its historical context. The nineteenth century had been one of great peace--no major conflicts like those of the Napoleonic Era. The conflicts that had developed were short, localized, and all victories for Prussia/Germany. In this context, Wilhelm's policies do not seem so risky.
Consider this final possibility: though hindsight can offer us the benefit of peering into the national situations of the European powers, perhaps Europe did not know Germany was really the most powerful on the Continent. France, the loser in the Franco-Prussian War, may have been out of picture, and Russia, the backward giant, may not have had too much credibility; however, Great Britain was the great question mark. Britain controlled an enormous colonial empire, its industrial economy was aging but still unrivaled, its political system was supreme and the country was at peace because of it. Germany may have felt it ruled the Continent, but it could not rival England. These three elements, domestic political concerns, a historical context that seemed to assure victory, and a perceived need to justify its power, combined to propel Germany into a an aggressive and risky foreign policy, both within Europe and the colonial world.