Irrational Games has posted concept art of creatures proposed for Bioshock that didn't make the cut, such as Jelly Man and Yam Hand. That guy up there is Monster Bug. That's partly how you can tell they never made it past the concept art stage: they're saddled with the sorts of absurd but descriptive names that artists come up with because they know someone else is going to give it a place and a name in the game universe.

Here's the skinny on Monster Bug:

This is one of the more gruesome pieces of concept work to emerge during work on BioShock - a huge insect slowly growing from within a human being and taking over the physical form. And as sickening as this image is, its true power comes from what's implied: what was it like for the original person transitioning to this state of organic fusion? And what mash-up of man and bug is hidden under that cloth?

And if you want an in-depth look at various directions Bioshock 2 could have gone, get your own yam hands on the coffee table book that came in the collector's edition. It's full of fantastic artwork and explanations of material that didn't make the cut in the sequel, including monsters, weapons, and places.