They all started killing each other because plasmid use makes you psychotic, unless you can afford to keep taking more and more.

They all started taking plasmids because they needed to compete in the workplace (then later, in the war) or end up homeless / dead.

Plasmids were legal in the first place because Randism, being based 100% on individual responsibility, doesn’t believe that things like feedback loops or cumulative effects can happen at a socital level, and so doesn’t believe in regulations.

Plasmids are a pretty clear metaphor for dehumanizing yourself to serve the market, especially because the Randian superman is a psychopath that is only self interested.

But even without plasmids the fact that the worlds elite were brought down to Rapture, but (to quote an audio log) “we couldn’t all be captains of industry, someone had to scrub the toilets” bred a huge amount of resentment from people who felt scammed and now trapped down there. Just like in the real world the markets in BioShock rely completely on low level workers to be able to function, and yet punish them for being in that position.