AC Current Sensing Switch Using Current Transformer
Not ridiculous, but a bit of a mess around the output transistor, and you've missed a trick with how to burden a current transformer. Together with the (good) isolation of the current transformer, there should not be any problem due to the way you've grounded the diode bridge, that bit is fine.

Normally, when we use a transistor in this sort of trigger circuit, we use it in common emitter. R2 is optional, it allows another degree of freedom when selecting the trigger level, rather than adjusting R1. This circuit has a fairly well defined trigger level when the base voltage is at around 0.7v.

An unloaded current transformer is a current output, so in this sort of circuit, we get far 'better' rectification by putting the burden after the rectifier, this removes almost all the diode forward drop from the output.

For a cheap'n'cheerful circuit, with a rather more ragged threshold, I would tend to use the second circuit. The zener clamps the output voltage to be safe for the microcontroller's digital input, and the threshhold voltage is whatever poorly-defined level the microcontroller input uses. 

Of course if the zener of the second circuit fails open, you could fry the microcontroller, the first circuit requires multiple failures to do that, so you may find the first preferrable.

Your capacitor value of 1uF is a bit puzzling, as together with the 650 ohm load, the time constant is way below one mains cycle, which will result in the circuit turning on and off 100 times per second. Perhaps this is what you want, in which case you could omit C1. If you want to stabilise the output, then C1 should be much larger as shown (or yet larger), though there will still be intermediate currents for which the output will chatter on and off at mains frequency.







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