My immediate reactions to this article fell into two categories:
1. Humor. Horrible as it is, at some level I find this very funny. I certainly think a lot of contemporary art could be used for similar purposes, although I do not condone any experiments along these lines.
2. Level design. Here is a good example of the use of space to invoke emotions, even if they are very negative ones. Isn't that a crucial element of level design?
Using these techniques raises some ethical questions, although I wouldn't be surprised if Acclaim found a way to turn this into a unique selling point.