"Sibley's plight was already desperate before the campaign began. His army was a wasting asset, and Sibley could not stay where he
was. He simply could not feed his army and their livestock in the lower Rio Grande valley....When the Confederate Army of New Mexico marched north toward Fort Craig, it had less than two weeks' food for the men and even less for the animals." -Rebels in the Rockies, p52
An army of 2500 living off the land doesn't sound like a plan to conquer the West.
Sibley and Jefferson Davis were both experienced in military operations in the West. Mexican war, Utah Campaign, etc. Sibley was in New Mexico Territory when he resigned to join the CSA in May 1861. They conceived the western operation based on their extensive pre-war experience. It was known at that time that cotton was grown in the southwest by the local populations. Both CA and AZ are major cotton producing states even today.
Sibley and Davis believed the local populations would support the CS annexation of western territories. They did not.
Sibley also sent emissaries to the Governors of Sonora, Coahuila and Baja California, believing they too would provide support. They did not.
That the plan seems stupid in retrospect is the Confederacy in microcosm ...