The Rebbe suggested that HaShem was pleased when He came to give them the Torah and saw everyone still sleeping in the early morning. Other sources indicated G-d's wrath: how dare Israelites make G-d wait?! On Shavuos, we have to read Torah all night to atone for that sin. However, I heard that HaShem prevented the mosquito bites in order to let the Israelites' sleep deeper, and he even started delivering the first two commandments during sleep, like under anesthesia, but because of thunder and lightning, and the sounds of Shofar people woke up and died. What is true?
Interestingly all of those can be true at once.
1). Some people might have been sleeping to prepare for the Torah 2). Some people might have been sleeping for their own enjoyment
Certainly perhaps many people should learn to atone for the group, especially since the group "2" might only exist if group "1" is not holy enough to make a positive impact.
I have heard many ideas here. Like they slept because they thought the Torah would be given in Nevuah as a dream. This could be good/bad:
1). Good: They were excited to receive the Torah and went to sleep to do it. A simple mistake. 2). Some thought Hashem wouldn't want to give the Torah in the physical world. They questioned their level and Hashem's love.
Some people might have died because of how close they came to Hashem (dvekus) and others died due to their world becoming unraveled (ie: Thunder and lightning), they couldn't understand how Hashem could do this.
It is also possible that just like a human can have more than one thought on a subject, ie: positive and negative. Hashem can too, even if everyone in the Jewish people might have been the same. Hashem can think positively and negatively about the same act because from Rachmanus it is looked at one way and from Din another.
I think you need to open up your mind. This is why Pshat and Drush can have so many answers. Because there are indeed many components and nothing is so simple cut and dry.