So it looks like there was a purge years and years before Ben gassed all of the Dharma folks... As soon as I saw the burning huts I had a flashback of Ben walking through Dharmaville in his gas mask.
It has always kind of been a point of contention that if Jacob is this good guy why would he kill all of the DI. I loved this episode for the humanity that it brought to Jacob. He does not represent some sort of infallible deity. And his mother before him killed off that whole village when she feared that they would use the light. So maybe Jacob did order the DI Purge. Maybe they were getting too close to harnessing the powers of the island for their own good.