Phoenix was programmed/brainwashed so he couldn't hurt Cocteau. He was able to control him to a point. He messed up when he let out guys he didn't program, hence this brilliant scene:

Remember Cock Toe was program Simon Pheenix to obey him and not to kill him also, hana

If they had thrown in a line about how Cocteau had included in Phoenixs rehab program that Phoenix would kill himself once Friendly was dead, that would have at least made it appear Cocteau had thought his plan through. There could even have been a short debate between John Spartan and Huxley about whether or not they should just kill Friendly themselves to force Phoenix to kill himself. It might have been interesting to see how each of them felt about the sacrifice one for the good of the many argument. But as it is, Cocteau just seems incredibly foolish and nave.

Cocteau was mad. He had absolute power, because all of the people on the surface were clueless what to do. Ed Friendly was the only person who was a threat to him ( or so he thought).

people in charge do stupid and terrible things.
His crimes are of pretension and hypocrisy. He pretends he is a good guy, but he is really a dictator. Everyone does what he says, but he's taking away freedoms.
San Angeles is probably more of a city state and probably isn't part of what was the US.