Spoilers ahead! This is all about the plot.
I finally reached the ending, and I was a little disappointed. I expected grand revelations, the villain's master plan and a dose of mindscrew -- like during Matt's rescue, but more. The Boss' line after getting the Iron Saint armor, "It feels like this is what I've been training for!" supports my speculation about what was really going on.
I find it hard to believe they were able to take advantage of oversights for so long, that they really got under the nose of a galactic conquerer, that they were cheating him at his own game rather than playing it by its design.
I suspected Kinzie had been compromised early on. First, she brushed aside questions that she should be seeking answers for. Then I overheard her suspicious exchange with Keith while driving. And I discovered that every other crib wasn't just razed, they were turned into spectacular displays of rubble, visible from a block away. Wasn't Kinzie the first to offer her intelligence to Zinyak? Also, her past with the FBI is suspect -- the FBI wouldn't fire someone for a kink lifestyle, but she would lose the security clearances necessary for the job if they judged she had something she could be blackmailed or enticed with. I figured the reason Boss chose to rescue Matt Miller is because he wanted a hacker who may not be compromised,. someone willing to dig deeper into the system, especially one who has a rivalry with Kinzie.
I don't know at what point Kinzie deviated from her instructions and began defying Zinyak; I think he gave her a lot of rope to hang herself with. He could have made a personal appearance in the Simulation any time he wanted to, but he only appeared to make a statement, first to Keith and then to Kinzie.
Even if that quantity of data clusters were an accident at the beginning, certainly they could have been detected and remedied after Boss had collected a conspicuous number of them. Zin troops were sent to stop Boss, but as Kinzie admitted when questioned, they weren't upgraded to overcome Boss' increasing power. After defeating the first Warden, Zinyak's remarks implied that shielding was an ability they already had, but weren't taking the fight seriously enough to use it. Kinzie later said the shielding code was added, suggesting they may have been upgraded, but why were they not upgraded further after a dozen more defeats?
So what was this all about? Why would Zinyak be grooming the Boss in elaborate rat-maze? This was all part of a Zin cultural ritual; in order to maintain his control of the empire, he needed this exhibition fight against the uncontested strongest member of the conquered race. The Zin troops and technology inserted into the Simulation were only to simulate their real forms and capabilities for two reasons: 1) to present just enough opposition to be an incentive for the Boss to acquire more power to fight them and 2) to also demonstrate their limitations against the champion of the humans, to show that no-one and nothing in the Zin Empire is capable of defeating the Boss -- except for the Emperor himself.
I believe Johnny Gat was the prime candidate, but he was unable to break out of his first prison due to a psychological barrier. Boss didn't have anything substantial enough to restrain. "The King" that Zach and Bobby spoke of (who I believe to be C.I.D.) either failed in the second stage, a Simulation with the same purpose as Boss', or the final stage, the duel with Zinyak; either way he was returned to a Simulation as Zinyak's plaything, to torture to death or coma.