Stupid twist, right? I have my own theories about that though.
The Sniper is probably the real Joe. The Joe Spencer killed must've been a clone of him. Emily is still alive, just in a coma of some sort. The reason they picked Emily for spencer is because Emily has a very strong psychological/physiological bond with Spencer (in real life and in his brain.). The Arm needed that part so that the Bionics work more efficiently. Hence, the reason why Emily is the catalyst.
But whatever, great game anyway!

Can't wait at all for the sequel!