That's more or less canon, Shadow had to have reprogrammed the ARK's computer to crash into the Earth when all 7 emeralds were inserted. Most of the time he's off-screen on the ARC he's performing tasks for Gerald, not that he was conscious of it.
Still, while you could argue that he got amnesia from his fall after SA2, he forgets everything again for his game. It's just weird. I do like the idea that the character inconsistencies were due to Gerald's manipulations>>132945178
My guess is it was a combination of Knuckles using the master emerald's nullifying effects and that Sonic hadn't mastered the super state