I think that the Initiative has some fascistic hints, after all they wanted to build the perfect soldier and to neutralize in secret an entire race (demons)
You know, I actually like Adam. It's an interesting creature and the most scary Big Bad. (At least to me. I think he's so scary, brrr!) What did go wrong? I think it was Riley. Professor Walsh was an interesting character and so the concept of the Initiative. IMHO, Riley was the weakest link: we were supposed to being interested in his moral conflict (Buffy VS the Initiative) and being interested in his understanding of the truth and everything ... but we didn't.