The way I see it the eye isn't out to eat us or replace us, rather to have us as an heir, as in being an arbiter is not a 'species' but rather a title, not unlike royalty, but for some reason even in death they still 'are' because there has to be an arbiter for each specific pair of attributes, so the eye is just looking for someone powerful and competent enough to take the 'burden of the crown' from him so that he can finally be free to be reborn(reincarnation rather than revival).
And that's why in the deadend we still sort of are the MC because it still is us, just that we have been given too much knowledge and power way too quickly and it broke our mind, which is why The Eye cares why we fight and if we are ready, not that it cares about us personally but rather it doesn't want the title to be given to someone unworthy or unprepared.
Hmm, a "passing the torch" type of thing eh? That would certainly explain the word "Heir" in full, and it's a good explanation for the Eye's wish being very simple, "just wanting to be born".
I too am of the opinion that the Eye doesn't want to consume MC. I'm not even sure that it's capable of doing so. He wants to either "merge" with him or something different like your idea.
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For your explanation about MC getting overwhelmed, my main objection is the word "sacrifice" the Eye uses. WIth some liberal thinking it could be made to fit but it just doesn't feel right to me. The entity is very somber when it speaks. This is what I think happens:
Without going into wild theories, I think that the best way to draw parallels here is to look what happened with Deryl:
1) Monster Deryl evolved by merging with his Chimera and Del.
2) Clone Deryl in the end merged with Monster Deryl, but Monster Deryl was too injured and Clone Deryl managed to take control and reshape the body and mind into the human-like version.
Something similar happens with MC & Eye.
1) MC evolves by merging with the Eye. (the word "merging" is indeed used)
2) The Eye is stronger than MC, so it takes control and shapes the final entity as it wants.
If MC becomes strong enough, he may be able to overpower the Eye and retain control of his body, but that's not necessarily a bad scenario for the Eye. Let me explain:
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We know that MC retains the memories of the entities he consumes.
We know that MC's tails are autonomous, having their own mind.
We know that MC can create functional copies of himself by changing his tails into a clone (latest Liz sex scene)
The problem is, that nothing he creates can survive if it disconnects from MC's body. Deadend37 gives a possible solution to that.
The Eye claims that it's surroundings are born of him and are a part of him. The implication here is that since the Eye is related to matter, all matter in the universe is a part of it.
So if MC is the heir to the Eye's power, doesn't that mean he is an heir to all matter as well?
Which makes everything a part of him, which means that even things cut off his humanoid body, still remain a part of him.
Which means that he can recreate all the entities he consumed, with an autonomous brain, and they can survive being cut off his main body.
So an all powerful MC, can also give a body to the Eye and allow it to exist in the "main" plane autonomously.
