I totally agree. I mean... it would have been interesting to see how it would have played and it's possible that it might have gone over well. But there's also the chance that it was such a tonal change from what came in the first 90 minutes of the movie that they would have lost the audience the moment it appeared.
People can sit through Pirates and don't seem to mind the juxtaposition of 16 and 17th century piracy with sea monsters and magic.

Besides, the book does set up the appearance of the squid through the references to the missing people, though the genetic part of the plan was a bit half-assed in comparison.
As strange as it sounds, I honestly don't mind the change now. I'm much more infuriated with the way they re-wrote everything else, however, like actually naming them the Watchmen and some atrocious costuming choices for key characters.