I really hated Eric, and not just in the sense of him being a rival. I hated him also for how his arrival suddenly made Ann and the rest of the family stupid and completely disloyal to Max. And on a completely meta-level, I hated that the character existed at all. It's not that I'm completely opposed to male rivals in games. But I need the option where I can either avoid them completely or at least keep them away from my potential love interests if I do everything right. That wasn't factored at all into this game. With Eric, it was all about minimizing damage by making choices that were oftentimes counter-intuitive. Except I don't think DS imagined that anyone would want to minimize Eric at all. I think he was meant to be the "mentor" that let you have his sloppy seconds, and you were supposed to be best friends with him. And as you mentioned, there's the ridiculous part about military school, but there's also Ann completely disbelieving her son to an unbelievable level.
I just "head cannoned" that Big Brother takes place in the same universe as The Company, and Eric got his hands on some of the level 1 mind-control serum and dosed Ann at work.
Makes more sense than most of the other stuff in the game, and given the things that happen in The Company, it makes for interesting possibilities for Eric's fate if you take the route of Kate's mother's offer.
It's either that, or Ann's an escaped mental patient who thinks that Harley Quinn from Suicide Squad is a great character and role model...
(They just should have done a live action version of Assault on Arkham. Much better Suicide Squad movie, and the characters aren't joke versions of themselves.)
And Eric just kind of suddenly dropped into the game an update or two in before almost immediately taking over. He would have worked a lot better as Ann's already existing boyfriend prior to the move who suddenly developed an interest in Max's sisters as well.
Bang on the money here.
The only thing I'd add is some sort of background to Eric, where he knew Ann's husband previously in some capacity, more than likely connected to the shady underworld stuff Eric was on the run from. It would explain his interest in the house and knowing about the camera and accessing other cams.