That's pretty bullshit and I don't think anyone writing the story at Obsidian is that stupid.I'll admit that I think Obsidian began production with the clear intent of having players end the game in opposition to Kyros, not expecting that so many would actually want to serve Kyros!
Working for the bad guys is the very core concept of the game, and it's what the whole appeal of the game is based on, so the majority of people, including myself, came in and tried to be a loyal fatebinder of Kyros. They really would've expected that.
because my main character's basic motivation from the start was always and was always supposed to be "a matter-of-fact loyal nobleman scholar of The Empire, fatebinder and enforcer of Tunon's Law, and firm believer in Kyros' Peace; will do good whenever possible, but will do evil if necessary". All things considered, I think that's a pretty basic and fundamental character concept in light of how the game is presented and how it starts, both in character creation and during The Conquest, but also (mostly) during the Prologue.
Yes, that.
The vast amount of background lore is indicative of a much larger game, but I'm sure it landed in the DLC department where bits and pieces of it got chopped off, and are now waiting for release as $5 dlcs. Because that's how market economy works.