I don't think it's meant to be condescending, just something to keep in mind when it comes to discussing belief systems. It's good that you respected your friends boundaries, but it's not an out of place assumption to think you may have without additional information, given how people who look down on non-standard belief systems tend to act, especially those that would try to invalidate what they believe in.
I'm somewhat curious if your academic stance against witchcraft and the negative mental effects extends out to 'normal' beliefs. If not, what is it specifically about witchcraft that makes you feel that it will have negative effects on their mental health? It sounds like you may just not be knowledgeable about it, so it may help you (and your friendship) to take an open and academic view and educate yourself on the stuff your friend believes. At worst, you'll gain knowledge on another belief system and have a deeper understanding of something that was foreign to you.
In the end, much like the other posters have said, let them believe what they want so long as they're not hurting themselves* or others. Believing in the make believe is something we all do to one extent or another, and I feel that my gods are no better or real than any others' - it's all just a crutch we use to get through the day.
*I have a much looser definition of hurting yourself than others would, and don't consider much short of permanent lasting effects as hurting ones self