I always liked Ethan, and have wondered why such a potentially interesting, not to mention cunning, dangerous, and potentially extremely powerful character was just tossed away the way that he was, especially since the Initiative doesn't seem to be particularly lucky in retaining prisoners. About the only possible reason that I could think of as to why he would never have escaped from the Initiative is that he cut a deal with them to help reboot their Super Soldier Program. In fact, I was always suspicious that Sam was the new version (Code name: S. A. M. for "Slayer Augmented Metabolism") created by duplicating the Shadow Men's original spell, (only someone like him would be ambitious and reckless enough to mess with magic that powerful) and that "As You Were" was actually a set up trial to test her abilities. Unfortunately, I never could talk Joss into developing the idea. (Have I ever mentioned that he comes over to our house 3 or 4 times a year for Sunday dinner? He loves my wife's chicken and dressing casserole)
But I haven't given up. We haven't seen the last of Ethan yet, you wait and see. If they can bring the First Evil back after 5 years and Dracula after 4, there's still plenty of time to work him in. In fact, he could very likely be a major factor in Angel's plans for Season 9, given the fact that he probably knew Giles better than anyone else not connected with Buffy, her friends, or what happened during Season 8.
You mark my words, we haven't seen the last of Ripper's ol' conjuring partner yet.