In hindsight, as fucking insane as Shadow seems now, it made sense. The original Sonic was an amalgamation of everything people found cool and "edgy" in the 90s. Like Bart Simpson and rock music. So, what was cool in the 00s? Metal, bleakness, edginess, motorcycles, and "realistic" analogies to the war on terror. It was Sega trying to apply the formula that worked for the time to the (then) current popular culture. The fact that it didn't work with a cartoon Hedgehog was a predictable outcome.
The climate of fear, dread and anger that came after 9/11 seeped into damn near everything in pop culture, and I think Shadow the Hedgehog represented the zenith of that. The point where it went too far, and I think maybe everyone was like "okay, we need to dial this back a bit. It's gotten fucking ridiculous." Which is why people make fun of 'edgelord' shit now. It wasn't just Shadow, but Shadow was one of the big things I think. The moment cartoon hedgehogs are turned edgy, you know shit has just gotten silly.
This concludes your anthropology lesson. Here, have a historical artifact from this bygone era.