Perhaps it is because of my admittedly unfair bias against this game, but I think it's actually worse than what people are making it out to be. If you think about what the characteristics of this Link and of all that happened before in the timeline, I can piece together what happened. SS's Link was obviously the first and the most pure, and his spirit of the hero is passed on down to the next iteration. In most games the hero is still pure of heart, but in the last games of the child and and downfall timeline we start to see some corruption of this spirit. TP insinuates that there is a darkness within Link, and we see a short glimpse into this dark side of Link.
But it is my postulation that something corrupted the spirit of the hero in the downfall timeline, when the Hero of Time died. Perhaps this has something to do with the split timelines; this branch got the short end of the stick. The incarnation found in ALttP and the direct sequels was still close enough to the rise of Ganon to be largely unaffected by this. Not so with Zelda 1 and 2's Link. By that time Hyrule had fallen into a state of ruin, and Link was never described as a hero, just a traveler who happened to come across Impa. In Zelda 1 he was still young and pretty neutral. He simply went out to collect the Triforce pieces and rescue the princess, because that's just what you're supposed to do, right? But by the time of his 16th birthday he has become corrupted by the world itself, his constant fighting, and the deterioration of the spirit.
Now he's worse than the monster he had fought and slain back in his youth, the proverbial words of Nietzsche coming to fruition. Oh, he's still destined to complete the Triforce, but that's merely a side effect of the deteriorating-but-still-functional spirit of the hero. We know that the Triforce is not infallible, since the Triforce of Power always seeks those who most embody that attribute, which has so far always ended up in the villain's possession. The Link in this game is 16, and since he has grown up in a ruined and evil world, and since his horomones are in overdrive right now, all he can think about is sex. When he goes through a town he can't help but stop in at the local brothel. There's no issue of loyalty here. Link's not loyal to Zelda; he's simply going along with Impa's prophesy to satisfy his desires with the local royalty. What an absolute pig he's turned into.
And if you really think about it, this explains the appearance of that old man right before you face Dark Link. The rest of the enemies set in place by the ancient king were simple-minded monsters that acted according to their training. They could not have forseen the corruption of the hero, and therefore act as simple bodyguards in all the palaces, including the Great Palace. But the king had an ace in the hole should something unforseen were to happen. He instructed the most powerful mage in his court to stand guard in the room with the Triforce of Courage as a failsafe.
He's there to give one final test to the hero who is to claim the Triforce of Courage, to be sure, but he may also act as a last-ditch effort to keep it out of evil hands. Normally he would simply give a challenging yet ultimately non-lethal test to whoever gets through the incredibly difficult Great Palace. However, when he saw the true nature of the supposed "hero" who walked through the doors, he hurriedly cast a spell that caused the shadow of Link to come alive and attack him relentlessly. This is the ultimate spell; since it is meant to know the enemies better than they know themselves it was never meant to be beaten. This is no test, he's doing everything he can to kill this corrupted "hero" before a calamity happens.
Of course, due to the sheer skills of Link, he manages to somehow defeat this ultimate spell and pries the Triforce of Courage from the old man's possession. Good thing for the rest of the world that he's merely a slave to his physical desires, who knows what would have happened had decided to do some real harm...
