First off, Gates wasn't the only one in designing the game. Tammy Dargan was the director, designer, producer, and writer of the game. That being said, despite some of the writing, PQ4 is still my favorite of the series and the one I have played the most.
Being a former law enforcement officer, I find that the first time in the theater to be grounds to suggest that Carey is an idiot. He can't go into the bathroom because of the smell. Carey is a homicide detective. He should know what the smell of rotting flesh is. Even if he didn't have a search warrant to enter the bathroom, he had enough probable cause to enter. Instead he watches a move and has a wet dream about a transvestite, and then gets kicked out.
When he has enough information, combined with all of the weird shit that happened at the theater, he should have called his boss, gotten a quick search warrant, and went to the theater with a full SWAT team and forensics team to arrest the guy and clear the theater. So he gets a medal for recklessly endangering himself, potentially leading to the death of another victim (Who WAS that woman anyways?) and leading to the death of a suspect that likely could have been arrested had he been following proper procedures.
Indeed, PQ4 went from being ok to batshit stupid rather quickly. Carey should have won a Darwin Award for his actions in the theater. My God I had it figured out before he did. :-/