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May not actually be the biological father of Walt, as hinted by Ms. Klugh, who took a blood sample from Michael when he arrived at their camp.
Michael will be seen again in a vision.
Michael and Sun had a relationship on the Island. This has been hinted in many episodes and also a mobisode. The Others knew about the affair, indicated in "Meet Kevin Johnson" when Tom realizes that Michael was having cold feet about blowing up the boat. Tom starts to mention names of survivors who would die if he didn't blow up the boat. He mentions Sun first to give Michael an emotional response
Hurley only said "Like your dad, yeah" to Walt because he doesn't want to tell Walt that Michael is dead.
In addition Walt tells Hurley that he doesn't understand why they have to lie and is told it is to protect those that didn't come back. If Walt knew that that did NOT include his father he might feel less inclined to comply, but since he thinks he is also protecting his father who he seems to want to see again he will keep up the cover story etc.
Heck, maybe he isn't even dead. I mean, we'd assumed that Jin was dead, further complicating things when his grave was shown, but boom-- he was blasted off the ship, alive. Maybe Michael was maybe even saved by Christian, or some other power, or maybe he even got out with ios own luck. I mean, unless I'm forgetting something. Like they found his dead body and I'm just forgetting it.
His body was blown to smithereens
"You can go now, Michael." Doesn't really sound like they are planning to keep him around.
It could be interpreted as "you've done your job, now you can get away from here". Though considering how outraged Harold Perrineau was about his unresolved story-line, i doubt there's more to come about Michael.
Inability to die
The Island wouldn't allow Michael to die or kill himself prior to joining the freighter crew wasn't due so much to the Island itself not allowing it, but because it was already known to happen that way. Now that it's known that several people from the "modern" timeline lived on the island during the 70s after time traveling there, it was already known that the events that caused the people from the modern timeline to ultimately end up living in the 70s was partially a result of events that happened on the freighter with Michael's involvement.
The die-hard fatalist would say that the Island was responsible for the structure of the time-line itself.
Maybe "the island preventing anyone from doing particular actions" thing is just a metaphor for knowledge of future events. Someone, like Jacob, might be from the future (let's assume that he is Aaron) and can pretend to anyone that the island won't let you do what you want, not because the island as such power, but because whatever happened in his future time, has to happen.
If Jin is alive after the freighter exploding, it is possible Michael is too.
Highly unlikely. Jin survived because the blast threw him into the water, but Michael was in the same room with the big pile of C4. No way to survive that, unless he's still immortal, which seems unlikely after Christian's comment and his subsequent non-appearance.
Perhaps Jacob's nemesis has the ability to make people immune to death. Hence his appearance as Christian Shephard at Michael's last moment, announcing the end of this immunity.
The producers said that Walt's "specialness" is not key to the overall story, but that we will learn something that will explain why the others were interested in Walt and why he was "special."
Not necesarily - Boone came back without Shannon, circumstances could have changed, and after Walt's mom's death Michael could have gone to Australia to get Walt but his stepdad might have NOT wanted to give him up. Just playing devil's advocate here.
Actually, the producers said the same thing, but I guess you know more than them so...
Yeah, I feel inclined to believe his absence may be making a point. They gathered even irrelevant characters as Artz and Frogurt for it and I don't think Michael's actor was as busy in real life as to say Shannon's actress. It would have been really easy for them to put him in, without Walt, maybe commenting on how he decided to leave his son with his step-father who can give him a better life. They could have make him be in an humorously awkward situation with Sun. They could even have made it so only the back or the top of Walt's (portrayed by another actor) head was shown as Michael nags him about obsessing over his videogame. More importantly, this also leaves Vincent out of the picture!
I think you guys are forgetting exactly how vocal Harold Perrineau was regarding his displeasure about being written off the show at the end of Season 4, even skirting around calling the producers racist. I don't think they would have asked him back, and even then, I doubt seriously that he would have agreed to return. I'm of the opinion that they tossed Arzt, Frogurt, and Boone out and not the others more as a gift to the fans and not because of to make any point or to serve the story in any specific way.
Easily explained in the new timeline: It is entirely possible that Walt's mother never died, or as suggested above, Walt's step-father was not willing to give him up.
It's also possible that Michael and Walt were on the plane, but were just not focused on in the episode. Sayid, who has a much bigger role in the series than Michael, only appeared fairly briefly. It seems likely that by order of importance, considering the limited time they had to play with, and the fact that it's physically impossible for them to have Walt on the plane, they chose not to give Michael any screen time.