Gamasutra had a chat with BioShock lead programmer Chris Kline and heard he's surprised BioShock became such a big hit:
In early 2002, realizing that the team needed to make a big budget title, then-Irrational Games decided: “Here was our idea: Let’s just make System Shock 2. This was easy because we’d already made System Shock 2. We knew it was a critical success, and we thought we knew all the things that kept it from being financially successful.”
“I said this was going to be about failure," said Kline, "and the very first failure was that we wanted to base this whole thing on System Shock 2.”
Irrational decided that the two main areas where the game needed to innovate were on narrative and AI -- specifically, an AI ecology that was not singularly focused on attacking the player -- but development abruptly stopped on the game at that point, for the next two years.
When they returned to the game, there was some concern about the fact that they were trying to sell to publishers a sequel to an unsuccessful game, so the developers "faked it," said Kline, by giving GameSpot an exclusive on the game alongside a planned System Shock 2 retrospective for its five year anniversary.