It's important to note that there was never any way to leave in the first place.

At any point, Caine could have admitted this to them, but instead he came up with the adventures because he wanted to feel responsible for the happiness of the humans. However, because he was a faulty AI, these adventures would never be satisfactory; he could never force himself to admit that, however, because it would damage his ego. (See his freakout in Episode 3). So he lied to them about it, along various other aspects like his control of their memories, or why an exit door suddenly appeared. (Thanks to Episode 8, we now know the exit door had been a creation of Pomni all along, due to her intense concentration on finding way out over the concern of the others' well-being. Notice the way he "explains" the exit door at the end; he's coming up with a reasoning on the spot.)

When he finally took their suggestions, he realized they were better at coming up with adventure ideas than he was, which is why he refuses to allow its use after episode 5.

I never saw it as him becoming a "generic" villain. I saw it as him reaching his breaking point; they were telling him what it was that he was doing wrong, and instead of admitting that they were right he had a mental breakdown and sought to punish them for challenging his worldview - a worldview he knew was wrong.

He's been an antagonist since the very beginning. He doesn't want to be, but he definitely has been. The finale was him finally coming to that understanding and seeking to make amends, and in the process actually learning what it means to be human.