This realization will explain a lot of obvious strategic mistakes made by the aliens in a brilliant case of Gameplay and Story Integration.

It is literally not until the very end of the game, when the Uber Ethereal is killed, that the aliens' plan actually goes awry. One can only imagine how much the Ethereals themselves were cackling whenever humans captured a minion of theirs or stole another piece of their technology. Doesn't seem very smart, does it? Of course, the Ethereals wanted humanity to get these things, to see what XCOM would do with them.

The aliens seem to make some fairly crucial mistakes, such as leaving the ever-useful Meld out where you can find it, risking their technology being captured, leaving the Ethereal Device ( which provides a psychic link to the Ethereal Hive Mind for sufficiently strong psychics) out where it can be snatched, etc.

Not to mention that it seems like the aliens are abducting more than they are just slaughtering in most missions.

On the other hand, it would make sense for official news reports (likely with prodding from the governments on the Council of Nations) to deliberately under-report the number of casualties, keeping panic from rising amongst the civilian populace.lp

The News Ticker in the Situation Room occasionally claims that the total human casualties across the entire globe number in the mere thousands, which wouldn't make much of a dent in a decently-sized city, much less the entire world.

However, given that you're selling alien tech on it in this game, it could also be a pun on The Greys.

Grey Market is a real life term for items sold legally but not though expected or approved channels.

Brutality on that level and a We Have Reserves attitude from even the front-rank troops is very intimidating.

Also, players may hesitate to open fire on their mind-controlled troops, but the aliens will gun down their own the minute they turn.

These things are bigger and tougher than any human, and if something so much stronger (or looks like it is, at least) than a human can't stand up to what the enemy is dishing out, then the soldiers may start to wonder what chance they have against the invaders, especially the inexperienced Rookies.

While it has been removed, the Will penalty for Mind Controlled aliens dying might make sense for the nastier ones.

Xcom enemy within mec