In Crackdown, it was revealed that the mad scientist you target, who's been busy making lots of mutant freaks, also helped engineer the superhuman Agents. Killing him has the unfortunate side-effect of releasing the freaks, which are a nuisance in the first game, but have totally infested the city by the sequel. It turns out there is a cure for the freak virus — but the Agency won't use it because the cure turns Agents back into normal humans again, which is entirely plausible considering their common origin.
Crackdown 2does have a deeper story, but the developers didn't put it in cutscenes. They actually integrated it into the orb collection with Audio Logs, all of which are told from the point of view of a different character.
Fridge Horror: That Agent you play as in One and Two? He's only three months old. He has never slept, he has never eaten, he has never drunk, and he never will. He will fight until he dies, and then he will simply be reanimated to try again. He feels no pain, he cannot speak, he doesn't even know of anything other than killing for the Agency. And he will do as he is told until the day he is finally allowed to stay dead, no matter how evil or amoral.
Get a good look at the standard Peacekeeper cruiser. Notice anything missing? Like back doors? There's nowhere for Peacekeepers to put apprehended suspects. Arrest probably isn't the goal if the Peacekeepers are onto you.