I wish all queries was as simple as this one.
The question is should 1 Pet 1:15 have ‘holy’ or ‘happy’.
The question is not which makes more sense, it is what does the text say.
The Greek word is ἅγιος which is ‘holy’ not happy. As you can see below not one translation uses ‘happy’.
241 ἅγιος, ία, ον as the quality of persons or things that can be brought near or into God’s presence holy; (1) of things set apart for God’s purpose dedicated, sacred, holy (MT 4.5), opposite κοινός (not consecrated, common); (2) of persons** holy,** pure, consecrated to God (LU 1.70); (3) of supernatural beings, as God (JN 17.11), Christ (LU 1.35), the Spirit of God (MK 12.36), angels (MK 8.38)** holy**; (4) superlative ἁγιώτατος, τάτη, ον most holy, very pure or sincere (JU 20); (5) as a substantive; (a) ὁ ἅ. the Holy One, as a designation for God (1J 2.20) and Christ (MK 1.24); plural οἱ ἅγιοι the holy ones, as a designation for angels (1TH 3.13); as human beings belonging to God saints, God’s people, believers (AC 9.13); (b) neuter τὸ ἅγιον what is holy, what is dedicated to God (MT 7.6); as a place dedicated to God sanctuary, holy place (HE 9.1); plural ἅγια holy place, (outer) sanctuary (HE 9.2); ἅγια ἁγίων most sacred place, inner sanctuary, very holy place (HE 9.3)
BNT 1 Peter 1:15 ἀλλὰ κατὰ τὸν καλέσαντα ὑμᾶς **ἅγιον **καὶ αὐτοὶ ἅγιοι ἐν πάσῃ ἀναστροφῇ γενήθητε,
NAB 1 Peter 1:15 but, as he who called you is holy, be holy yourselves in every aspect of your conduct,
NRS 1 Peter 1:15 Instead, as he who called you is holy, be holy yourselves in all your conduct;
NAU 1 Peter 1:15 but like the Holy One who called you, be holy yourselves also in all your behavior;
RSV 1 Peter 1:15 but as he who called you is holy, be holy yourselves in all your conduct;
NJB 1 Peter 1:15 but as obedient children, be yourselves holy in all your activity, after the model of the Holy One who calls us,
ESV 1 Peter 1:15 but as he who called you is holy, you also be holy in all your conduct,
NIB 1 Peter 1:15 But just as he who called you is holy, so be holy in all you do;
NET 1 Peter 1:15 but, like the Holy One who called you, become holy yourselves in all of your conduct,
VULM 1 Peter 1:15 sed secundum eum qui vocavit vos sanctum et ipsi sancti in omni conversatione sitis