Man In Black did NOT die
For those of you who think The Man In Black died, your all wrong. I thought it was widely established before this episode that MIB and Jacob can't kill each other (loophole) but i guess people are still wondering. Well this episode cleared it up, mid-episode mother says she made it so MIB and Jacob can never hurt each other. Then after he killed mother MIB says to Jacob that he cannot kill him citing what their mother did. Jacob says he doesnt want to kill him. So what does he want to do think back to when jacob asked what would happen if he went into the light, mother makes it clear he WILL NOT die, he will suffer a fate much worse than death. So clearly Jacob intends to put this fate upon MIB, MIB never dies he suffers a fate much worse than death, he loses his humanity and his body (like he said to richard in 6x09).
Why is Man In Black evil?
Think about it both Jacob and the MIB share one important view with their mother but both also differ on another. Jacob shares the belief that the island is special and it needs to be protected, while MIB disagres. MIB shares the view that all people are naturaly bad, while jacob differs. Looking at the circumstances its easy to see why MIB is so pissed and has become "evil". Not to mention Man In Black grew up around people who were as he considered evil.
Why can't MIB leave the island
Ok, so why is Jacob keeping his brother on the island? Well im not as sure on this one, but i believe its because MIB is now the "light" that was in the river. If he leaves the light goes out there and everywhere else. I dont expect a more in depth answer so id bet im right.
So please stop with the whole The Smoke Monster and MIB are different people because they are not The smoke monster is the soul of The MIB and he can acess any dead body on the island. So he primarily chooses his own body.