Brother, the character in "The Matrix" who betrays Morpheus, Trinity, Neo and the others was indeed called Cypher, but not Louis Cypher. You are getting two movies mixed up there.
The traitor in "The Matrix" was only nicknamed Cypher — his real name was Reagan — because a cypher is an encryption algorithm, and said person was someone who could "read" the Matrix and immediately deduct from the vertically scrolling glyphs on the screen what exactly he was looking at in terms of events or scenery.
The character Louis Cyphre on the other hand — note the slight difference in spelling too — is from the movie "Angel Heart", and was played by Robert De Niro. And in that movie, Louis Cyphre is an eccentric rich man who recruits the private detective Harry Angel (played by Mickey Rourke) to track down his missing son, but what Harry Angel doesn't know is that he himself is the lost son he is supposed to track down, and that Louis Cyphre is, in fact, the fallen angel Lucifer.
Returning to the Matrix analogy, Agent Smith also doesn't represent the people who are still plugged into the Matrix, but rather a (rogue) control program, and thus compared to society, you could say that he represents an autocratic alphabet agency. However, Morpheus does explain to Neo that any single one of the people who are still plugged into the Matrix is a potential enemy, as they can be taken over by an Agent at any time — this is demonstrated many times throughout the movie franchise.
To myself, and projected onto the society we live in, this represents the fact that anyone who still buys into the artificial-scarcity-based control system, the system of political leaders and the integrity of the mainstream media, is a potential enemy because they can be turned against you, in a tactic known as "peer pressure". It's the very same thing as what you see in sects and cults whenever a cult member is not going by the rules of the cult. The other cult members will then attempt to bring the "misbehaving member" back onto the party line through guilt trips and other psychological manipulation.
We all recognize this as a cult/sect tactic — not to mention a tactic used by high school bullies, and I have personally been on the receiving end of that tactic, so I have first-hand experience with it — but what most people don't realize is that society as a whole is no different in that regard, and at least over here in Belgium, the government's propaganda machine works in exactly the same manner.
Anyway, just my two eurocents worth of commentary. That should still be worth about 2.5 dollarcents in the Church of Acronymia these days.