Cleverestbunny is quite right:
I think that his ability to turn into "a cold blooded murderer" may have already been bubbling under the surface.
Walter tells us so in the memo he dictates to Keyes:
"Maybe she had stopped thinking about it, but I hadn't. I couldn't. Because it all tied up with something I'd been thinking about for years. Since long before I ever ran into Phyllis Dietrichson. Because you know how it is, Keyes. In this business, you can't sleep for trying to figure out all the tricks they could pull on you. You're like the guy behind the roulette wheel, watching the customers to make sure they don't crook the house. And then one night, you get to thinking how you could crook the house yourself. And do it smart. Because you've got that wheel right under your hands. You know every notch in it by heart. And you figure all you need is a plant out front. A shill to put down the bet. And suddenly the doorbell rings and the whole setup is right there in the room with you. Look, Keyes, I'm not trying to whitewash myself. I fought it, only I guess I didn't fight it hard enough."So it didn't some from out of nowhere. He'd
"been thinking about [it] for years," so chances are probably that he'd never have done anything about it if someone like Phyllis hadn't come along. And he is, as you say, "a smart and sharp guy." But his downfall is in thinking of himself that way, because he's not quite as smart and sharp as he believes when that someone
does come along with ideas that are both different and more diabolical than his.
Backing away from psychological matters of character and looking at it from the viewpoint of story construction, there is also the aspect of dramatic "telescoping" which becomes necessary in pretty much any screenplay. The premise is established in the first scene:
"I killed him for money...and for a woman." It's shorthand for primal urges audiences understand: greed and lust. Having established that premise, the speech quoted in the long paragraph above provides background that gives credibility to Walter's surrender to those urges.
Poe! You are...avenged!
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