...I think people need to realize that it WAS supposed to be Killian's idealized image of "The Mandarin". with that in mind, it really makes for an interesting-looking figure that symbolizes the kind of terror he wanted to create (bonus points since you also get "Trevor" in a fancy get up).
I'll admit, I don't get the discontent some people have with Killian's character. Yes, he wasn't imposing or scary, but more than anything he felt more like a character that you were MEANT to hate.
I find his character interesting in that he's sort of a subverted version of Iron Man's nemesis, being the real "Mandarin" and all. By giving him an actual identity than merely a "face", he's turned into something more human than one might think, and his placement in the MCU as one of Tony's very own "demons" makes for an interesting villain than usual. I mean, let's compare him to the other IM villains...
With Stane, he always seemed like the evil uncle who wanted to dethrone the heir by taking over Tony's company and "improvising" (read: stealing) Tony's ideas. Whiplash on the other hand wanted classic revenge in the form of making a statement, specifically by showing the world that Iron Man was not as invincible as he seemed. Then there's Justin Hammer who always saw himself as Tony's rival and superior, especially with his goal of making Iron Man look like an "antique".
Finally we have Killian, a guy who was one of Tony's biggest fans until he got shunned by the very guy he admired. More than anything, Killian WANTED to be like Tony. His schemes involved killing and stealing what Tony had, not so much to do it in front of everyone's eyes (heck why else would he want him quietly assassinated throughout the film?), but rather to outright replace the guy. He employed Maya because she was interested in Tony, and abducted Pepper as his "trophy" simply because she was Tony's lover. In the film's climax, we found out that Killian created his own army of Extremis soldiers with himself powered-up like others whereas in stark contrast we have Tony with his army of Iron Man suits. I find it interesting in that Killian is treated as sort of a mistake, a "demon" that Tony had created in his past lifestyle. As such, the Extremis soldiers and Killian are the "demons" that he eventually had to face, and with the Iron Man suits by his side, what better way to do that than use the very tools that made him into the changed man he is right now. I like how Killian takes responsibility for all of the incidents created by "The Mandarin" claiming that it was truly his fault from the start, admitting that he's the true "Mandarin" that Tony was truly searching for all this time.
To be honest, Killian never seemed scary or imposing in my eyes, but that doesn't mean that he wasn't dangerous at all, and I find that he's definitely one of Tony's most dangerous foes.
I'm not sure if i will pick this up or not. I was caught completely off guard but i enjoyed the scene also. i can't think of another scene in any other movie that surprised me as much as that one.
thats why I liked so much that plot twist 
