My theory is that the creators saw how much Rainbow Dash was losing fans for acting like a jerk so they made this episode and this character to show people how bad she COULD be. Rainbow Dash can be full of herself and get competitive, but at least she knows what's really important, at least since "Fall Weather Friends."
As I watched the episode, I realised that what this character was, was Rainbow Dash if the events of the last few years hadn't happened to her. Brash, arrogant, wanting victory at all costs. If Rainbow hadn't had the experiences she'd had with her friends over this series, this is what she would have become.
I like her design. I still say that she has psychopathic tendencies. I'm not saying she is a psychopath(which doesn't always mean a person will be violent or insane) but that she could be diagnosed as one.
She was misguided and clouded with the desire to strive above the rest. Striving and pushing yourself isn't bad--just like RD said. She just went about it the wrong way which leaves room for growth. Which is a characteristic I love of all the Hasbro ponies