The Island at the End of the Universe
Let me preface this theory by stating that I do not believe it is true, because it doesn’t mesh with my overall ideas regarding Lost. And most of these ideas have most likely been presented before. However….
For those who have read Hitchiker’s Guide to the Galaxy, you can probably skip this paragraph. In it there is a Restaurant at the end of the universe. This restaurant allows guests to eat and watch the end of the universe within a protected time bubble after which the restaurant rewinds in time and allows the next dinner party to view the wonderful destruction of the universe.
Perhaps the island is in a time bubble as well. Perhaps there were people aware of the end of the world(most likely including Jacob and MIB) who either helped develop the island or found an island with special properties that allowed them to go back in time right when the world was about to end, so they can try and prevent it.
This has happened many times, and MIB has become wary and disillusioned, and believes that there is no hope, that the world can not be saved. Jacob believes they are learning with each iteration, and are making progress each time. Jacob keeps bringing people to the island, hoping the right combination of people will help save the world.
The dharma folk were probably helping and doing pretty well, which is why they were allowed to stay in the first place. However I think as time went on, they lost their focus (maybe with Radzinksy taking over) and were doing more harm than good. This is when the Purge occured.
Maybe this is why there is whatever happened, happened speech. Hawking is trying to ensure that certain events occur that are central to saving the world (god help us all, were all dead talk) Or maybe you can’t change the past within each iteration. But either way I think Jacob knows he has gotten it right this time. And maybe his death is a necessary event in saving humanity and that is why he seems so accepting of his own death.