The Ancients knew that all librarians were helpful to Mike, and thus ordered Rita killed since she was a librarian.
So, why did Mike blank out and have Laser-Guided Amnesia? Either this is a side-effect of formerly having the embryo in his head, or Jack simply knocked him out before killing Rita.
Because the embryo was planted in Mike, it has a special connection to him. It is possible that the pills that were supposed to destroy the embryo instead merely banished it, and it was somehow able to grow afterwards.
The Keeper really was the Shapeshifter all along, and Mike was only hallucinating that she had a connection with the librarian. In reality, Mike has always been evil and therefore his dark world counterpart will be likewise.
Alternatively, because Mike has multiple personality disorder, he may have multiple dark world selves, of which Jack is one.
Alternatively alternatively, Mike does have multiple personalities, which is why his Dark World counterpart is the Shapeshifter, who has multiple appearances.
- Alternately: The Dark World is real, Jack is the shapeshifter and Mike is as good a guy as he can be, but he's still crazy. The events of the first game damaged his mind.
Except maybe for Mike Dawson's fate. I mean, many of the events of the late game seem unrealistic. The strong man actually liking Mike? That's a big clue right there.
- He does wake up in the therapist's office at the end.
Jack is just a guy who is really good at sneaking.
Hated by nearly everybody? Check. Has only one friend that turns out not to be? Check. Poor relationship with parental figure? Check. Whiny, annoying, and wimpy? Check. Both protagonists in a piece of Mind Screw? Check. He's pretty much Shinji as a white guy.
After the events of Dark Seed II, Mike wanted to become a detective. He couldn't, because everyone in the town was either dead or hated him. So, he faked his death and fled to Canada under an assumed name (which we never learn) to become one. It would explain why the protagonist in that game appears to exhibit Dawson-like competence and charisma, and why (s)he wastes time instead of focusing on the matter at hand.
Judging from slowbeef's comments in his LP of Dark Seed II, the real Mike Dawson doesn't want to talk about his time at Cyberdreams. It's highly possible that he burned some bridges on the way out of that job. As a consequence, the team decided, out of spite, to make the sequel in such a way as to make Mike Dawson (the character) as unlikeable as possible as a giant Take That! to the real man. They intentionally hired a replacement actor who looked rather wimpish and uncool, and had him talk in a nasally lisp and wear very 80s clothes to further emphasize his loser qualitie. His entire story made it seem less like "oh he's insane" and more like "oh he's a paranoid loser." All of this to make it clear they hated him. To pour further salt on wounds, this game would come a month after the release of the company's I Have No Mouth, and I Must Scream, which many see as a far superior game.
