One of the best theories I've heard yet, from you and myrdinn. I think the correct term you're looking for is "sadist" though, not "masochist."
Vaylin is playing a long game, just like Ramsay did in his rise to power at Winterfell.
But before Vaylin can execute her coup, they still have SCORPIO to deal with, first. With a super-intelligent machine sitting on the Iron... err, Eternal Throne, everyone is basically screwed, for the moment.
Now that I think about it, I'm seeing some parallels here, between SWTOR and GoT.