I don't think it was all envisaged from the beginning of Life on Mars though, I think it was only developed through this series; partly because after Sam left the series naturally gravitated towards Gene Hunt.
I don't think Keates was actually Satan, I think he was litterally the anti-Gene, an unrepentantly bent copper who dragged other down with him. the thing about Hunt that even Sam acknowlwdges is that he wants to bang up criminals, he's focused primarily on keeping the general populace safe and putting "villains" behind bars. This is something that Gene hammers home to Sam, Gene is the ultimate uninhibited, primative, copper - he goes out and gets the bad guys, takes no [ahem] and hang the consequences.
Keats is the complete oppersite, obsessed with protocol, and "results" in terms of stats and form filling- there's a quite serious point about modern policing in there. I say he is the anti-Gene, because where Gene has chosen to stay behind in purgatory to hasten other coppers along, Keats has fairly obviously been sent by someone (the Devil) to drag the same people to Hell.
More on Gene: He said that he had "forgotten", which is also what the Con-man claiming to be Sam said to Alex earlier. This implies that Gene is not a "chosen" agent so much as someone who has chosen not to "cross over", note his pointed refusal to enter the Pub with the others.
On the world: I think it moves foward with the people in it, and it isn't actually centred on Gene; Keats lied about that. It may be that everyone there is a lost soul in some sense or another. Remember the Italian guy who inexplicable dissapears, "back to Italy" because someone else has "died". What about the prisoner who is obsessed with killing coppers, and then dies having become "a legend". I think the policeman part is just the only part we actually see; I don't think it's just Gene's fantasy.
So Gene has been ther 30 years, Sam was there 7, Ray and Chris probably at least ten, Shaz probably less judging by the relatively recent context of her death. The real question is how come there aren't a lot more coppers getting the "culture shcok" thing when they arrive?
Is it just a certain hyper-rational mind, or is it a privilage reserved for DCI's