This is based mostly on a through away line in RD Presents: Spidares, when "encouraging" Twilight to continue her work, she briefly asks this line: "Maybe dear old Celestia growing feeble in her old age. Or maybe Celestia already snapped years ago, and maybe someone should overthrow her, before her madness swallows up all of Equestia."
This was most likely just a throwaway line, but it really does put a new perspective on her: She had to run a country for centuries, if not millenniums and has seen who knows what and had to go through who knows how much, stress, while also likely having to make a lot of tough decisions, she has to live with for ETERNITY. Plus, in the short Budget Impasse, she and Luna seem very civil with each other, until Luna rebels against her for something completely petty. Imagine having to vanish your own sister, over a completely petty argument for a thousand years. Maybe her acts of cruelty, are just a means provocation, in hopes that her ponies will one day rebel put her out of her misery, once in for all.
She may even be training Twilight to learn how and giving her plenty of motive to do so.
Because honestly, you can't expect our resident Eldritch Abomination not to have a vested interest in keeping the playing field clear of any interference. Plus, what's the opposite of a possessed pony? A pony and an eldritch horror as separate units. I imagine Taz would be quite miffed about illusions of normalcy being shattered.
The series has already hinted that the reason Twilight turned out the way she did, was a combination of Celestia's cruelty and the Crapsack World they live, and she may have been more like her cannon self, before Celestia took her. Maybe, we will get on arc, that will give us an in depth look at how the MAS!Mane Six, became the incompatible Rag Tag Bunch Of Misfits they are today.
That is why she is the psychotic, Manipulative Bastard, we all all know and love, and why Celestia seems to ignore her crimes, despite Pinkie making it clear that she out to get her. Because they live in a racist society, Celestia could not allow the public to know that she had mothered an Earth Pony child and sent her to live with some rock farmers, that were loyal to her regime. This is also why Pinkie resents her so much. This is also why she is an Element of Harmony, Celestia was hoping it would lead to her daughter mellowing out.
- Anthropology: Think of how many primates Greg could have in the story, and it would introduce his version of Lyra.
- Fallout: Equestria: It is arguably the most popular crossover Fan Fic ever made and it's dark atmosphere would make interesting parody material.
- The Conversion Bureau: Plenty of stuff to parody.
- All-American Girl: Again, more opportunities for primates.
- Pony POV Series: Not as likely, do to its sheer length, but why not?
- Asylum: Yet another Dark Fic for Greg to pick apart.