The biggest plot hole for me was David's lack of interest in what had happened to Shaw. So he orchestrated the whole thing as an experiment to see what would happen - except that he showed no interest at all in what Shaw removed from her body.
Who says he had no interest? It's not like Weyland GAVE him much of a chance to follow up on Shaw's 'caesarian.' David was thawing his boss out during that, and was basically kept at "Dad's" side from that point until his head went flying. (Weyland, then in a big hurry to meet the Engineer, would have considered the squid-baby a "meat by-product.") EXCEPT FOR when Weyland and Vickers had their father/daughter talk - he might have looked in on it then, and wisely decided to keep it locked up. If already full-grown then, it would certainly explain his complimenting Shaw on her courage/survival drive the next time we see him onscreen.