I think that Ballard working with the Dollhouse makes sense actually. I don't think that he's done a complete 180 on his thoughts. Rather, he sees this as an opportunity to work closely with his enemy and to gather more info. All this time he's been wanting to save Caroline. Saving Mellie instead fulfilled that for him, but I think he's still truly vested in looking over Echo. He can do that now that he's in with the Dollhouse. His position is much like Boyd's earlier in the season - he too questioned the ethical implications of what they were doing, but eventually came to see the good/nobility in their actions, however few. He's still in a grey zone, and I think that's where Ballard will be heading in Season 2 if it gets renewed.
Some news about that actually:
Sources say Dollhouse fans shouldn't lose hope; that despite the show's recent ratings, the show is still alive. Whedon pitched the network on his vision for season two late last week. Discussions have commenced between Fox and the studio about how to make the show work financially.
Hopefully we'll know one way or another soon.
EDIT: I hereby make my 12,000th post on Dollhouse. :thumbsupbuddy: