1. Whidmore is definantly bad in my opinion. Just look at how he treats Desmond, do you really think he cares where Ben got 324 dead bodies? I sure don't.
2. I think when they tried to nullify the gas they probably set off some sort of defence system.
3. They were probably developing the gas to experiment with it on the island, they would then use it off the island, probably sell it to governments.

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"John: Is that some sort of code?
Ben: No John, we don't have a code for 'There is a man in my closet with a gun to my daughter's head' but obviously we should."