Yeah, he'd be a terrible leader, but he only wants the title so he can be village protector and be looked up to by the people who used to shun him, it's a child's dream. However, since he's been back he seems to be more concerned about Sasuke than becoming Hokage.
He feels bad that his friend who is walking a dark path and wants to bring him back from it. Compared to wanting to become Hokage just for shits and giggles it's a more reasonable goal for Naruto to have. I highly doubt he'll ever be able to beat the badness out of Sasuke, but he has set a precedent for doing just that in the past.