That's a cute story, I certainly like its tone of mystery.
However, the premise seems a bit wrong (or at least the narrator is wrong). If your brain actually degenerates from usage of the ring (and is no longer used in daily life, acting only reflexively), the premise that you are the happiest from following the ring might be flat out wrong. I think happiness (I tend to think in terms of well-being, which let's say ranks every good thing you can feel, by definition -- and assume the "good" is something philosophically infinitely wise) is probably something like a whole-brain or at least a-lot-of-brain phenomenon. It's not just a result of what you see or what you have in life. In fact I'm sure two persons can have very similar external conditions and wildly different internal lives (for an obvious example compare the bed-ridden man who spends his day on beautiful dreams, and the other who is depressed or in despair).
What the ring seems to do is to put you in situations where you would be the happiest, if only you were not wearing the earring.
The earring that actually guides you toward a better inner life perhaps offers only very minimal and strategic advice. Perhaps that's what the 'Lotus octohedral earring' does :)
Suppose you had a concrete definition of "happiness", as some seek a concrete definition of "consciousness".
That implies that it could be maximized. Perhaps along a particular subdimension of a multidimensional concept, but still, some aspect of it could be maximized.
What would such a maximization look like in the extrema?
Could a benzene ring be the happiest thing in the universe? It's really easy to imagine some degenerate case like that coming to pass.
You can generally play this game along any such dimension; "consciousness", "agony", "love"... if you have a definition of it, in principle you can minmax it.
Also, more to the point of your observation: we should be indeed very careful about any extreme and any maximization, because I presume when we maximize a lot we tend to bump into limitations of the metric or theories employed. So we should only maximize up to a region of fairly high philosophical confidence, and this is why we need progress in philosophy, psychology, philosophy of arts, philosophy of culture, neurophilosophy, etc.. in lockstep with technological progress -- because technology tends to allow very easy maximization of simplified models of meaning, which may rapidly break down.
I think one example might be that in medieval times maximizing joy and comfort could be a pretty good heuristic in a harsh life of labor. Those days we actually perhaps have to seek out some discomfort now and then, otherwise we'd be locked in our homes or bed ridden with all affordances some of us have; we have to force ourselves to exercise and not eat comfort food all the time; etc.. I think some hard drugs are a good example as well, a kind of technology that allows maximizing desire/pleasure in a way that is clearly void and does not seem associated with overall good experiences long term. An important fact is that our desires do not necessarily follow what is good; our desires are no omniscient/omnibelevolent oracles (they're simply a limited part of our minds).
We need to put thought/effort into discovering and then enacting what is good in robust, wise, careful (but not too careful), etc. ways. Let's build an awesome society and awesome life for all beings :)
More to come. In summary, I became confident that we can, if we're careful, know those things and do something like 'maximize happiness' (as I said, I prefer more general terms than happiness! There's a whole universe of inner experiences beyond just the stereotypical smiley person, I think -- I tend to think of 'maximizing meaning' or 'maximizing well-being').
The basic fact that allows this process to make sense, I guess, is that our inner experiences are real in some sense, and there are tools to study them. Not only are our inner lives real, they make part of the world and its causal structure. We can understand (in principle almost exactly, if we could precisely map our minds and brains) what causes what feelings, what is good and what isn't (by generalizing and philosophically querying/testing/red teaming/etc.), and so on for every facet of our inner worlds.
In fact, this (again in principle) would allow us to make definite progress on what matters, which is our inner lives[1]. I think Susanne Langer put it incredibly well: (on the primacy of experiences as the source of meaning)
"If nothing is felt, nothing matters" (Susanne K. Langer)
This is an experimental fact, we as conscious beings experimentally see this fact is true. So in a way the mind/brain is kind of like a tool which allows us to perceive (with some unreliability and limitations that can be worked with) reality, in particular inner reality.
We can actually understand (with some practical limitations) the world of feelings and what matters. To that we simply experiment, collect evidence and properties about feelings and inner lives, try to build theories that are consistent, robust to philosophical (that is, logical in a high level sense) objections; and then we simply do what is best, or if necessary try out a bunch of ways of life and live out the best way according to our best theories.
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Addendum: Let's take the benzene ring as an illustrative example of our procedure. Someone claims 'a benzene ring is the happiest thing in the Universe, and we therefore must turn everything into a sea of benzene rings. Destroy everything else.'. Is that claim actually true? Let's explore.
It isn't, I claim: if "Nothing is felt, nothing matters". When you are asleep (and not dreaming or thinking at all, let's suppose) or dead, you don't feel anything. No, thoughts are, and must be, associated with activity in our brain. No information flowing and no brain activity, no thoughts. No thoughts, no inner life. Moreover, thoughts require a neural (and logical) infrastructure to arise. It's logically consistent with how we don't observe ourselves as rocks, gas clouds, mountains, benzene molecules, or anything else: we observe ourselves as mammals with actually large brains. There are immensely more rocks, gas particles, benzene molecules, etc.. then there are mammals in the universe. Yet we experience ourselves as mammals. Benzene molecules, rocks and gas clouds just don't have enough structure to support minds and experience happiness.
The tone of mystery is very much Jorge Luis Borges' writing style. My take is that it is probably a kitschy and playful take on Borges' style at least.
However, the premise seems a bit wrong (or at least the narrator is wrong). If your brain actually degenerates from usage of the ring (and is no longer used in daily life, acting only reflexively), the premise that you are the happiest from following the ring might be flat out wrong. I think happiness (I tend to think in terms of well-being, which let's say ranks every good thing you can feel, by definition -- and assume the "good" is something philosophically infinitely wise) is probably something like a whole-brain or at least a-lot-of-brain phenomenon. It's not just a result of what you see or what you have in life. In fact I'm sure two persons can have very similar external conditions and wildly different internal lives (for an obvious example compare the bed-ridden man who spends his day on beautiful dreams, and the other who is depressed or in despair).
What the ring seems to do is to put you in situations where you would be the happiest, if only you were not wearing the earring.
The earring that actually guides you toward a better inner life perhaps offers only very minimal and strategic advice. Perhaps that's what the 'Lotus octohedral earring' does :)