He did, they just executed it badly.
The hints were there, but with this mad rush to the finishing line (are HBO running out of money?), characterization is going out of the window. As I pointed out, I'm not so surprised at this outcome as all the elements for it had been set up and hinted at a long time ago (just look at how Dany is a mirror to Cersei - hilariously inept ruler, indulgent towards her murderous child, fashion sense, incest), but the way in which it happened, and in particular the lack of reaction from other characters is telling.
Both Varys and Tyrion in particular are not stupid, and have served multiple mad rulers in Varys' case. They would have seen the warning signs early on. I'm not entirely willing to sell Varys out yet, as we don't know the full content of the letters he was writing in the last episode, but it's not a good look that they thought everything was fine, right up until the point she abruptly descended into insanity.
I was hoping that Varys might hire Bronn to take out everyone with a claim to the throne and institute a people's republic of Westeros, but, alas, that seems rather unlikely now. Varys and Tyrion are no Ammanas and Cotillion, more's the pity. Shaking up the entire political order is not their style.