Apocalypse shows how much power that an organization like X-com could truly hold - an independent military with very little oversight, which is allowed to build its own arms and equipment.
Why the morale penality when you kill an alien you mind controled? Well, first of all, you are shooting someone one of you guys has a Psychic Link with, so s/he's not going to appreciate that. and secondly, you are killing someone that is currently helping you. Even if it's an alien, this is still a ruthless thing to do.
Plus some of the reasons given in XCOM: Enemy Unknown: Seeing something that tough die so easily is demoralising, as is the brutality of We Have Reserves...As done by either side.
