Just a stream of thought. The room was most definitely like a Clockwork Orange. In fact, I thought of that immediately. As this would be a form of brainwashing to try to conform people/deviants to certain societal (is that a word?) ideals, perhaps the others are trying to live in the Utopia that the Hanso Foundation wants(ed) to achieve. Another reason to only take the children as they can be molded much more easily into a belief system. Old Smokey could be another tool created to conform people to certain standards, being able to "see" into people's minds, determine their potential for "change". Ole Smokey didn't kill Mr. Eko at first because he seemed remorseful about his violent past. But as soon as he was able to shed his guilt, blam-o he is now a free thinker and a threat.
Which brings up religion and how that is woven into everything. Religion can be a controlling tool as well. For some the fear of "God's" wrath/punishment will motivate people to do things that are not natural to them as humans....blah blah blah