Why did Sacha Baron Cohen frame an innocent man as a "terrorist"?

Because Cohen is obviously an atypical individual, to put it mildly. Even play acting, it's hard to imagine any sane person going to the lengths that Cohen did with his deranged character. If most people behaved to the world the way he did, after coming to their senses most of them would probably die of embarrment, no matter how much money they got.