A far too obvious flaw in the Cypherite logic...

Everywhere you look in the Cypherite organization, the Matrix is portrayed as the perfect, soothing heaven to live in while the Real as the ugly, depressing hole to escape from.
I think that's simply wrong. The first Matrix was a perfect heaven, and it turned out to be a failure, and is definitely not what we have now.

Look at the liaison officers and they way they're describing their previous lives -- all of them were successful, had a secured place in society, and generally had homes to live in and enough to eat and drink. Heck, I don't even wanna speak of Diversus. (Yes, some of them were somewhat different, but I'm trying to generalize here.)

However, life in the Matrix also has a shadow side. You can be a lower worker without any perspective to the future, you might be a weak loser gaining nothing but disdain from your environment, or you might just be a starving wretch, looking for overnight stays in run-down motels.
I think all those types would have it much better in the Real than in the simulation.
You think Zion is a pathetic hole compared to the Matrix, well, look at the Barrens.
You think the gunk the Real has to offer is disgusting, but think about what dustbins or the poor man's groceries can oppose to it. The Matrix has far more to offer than juicy steaks.
You think the tense, violent situation in the Real, or as a redpill, is less pleasant than a quiet, secure life as a bluepill -- I'm sure there are enough Exile gangs around slum neighborhoods that would gladly accept the challenge to prove you otherwise; or heck, I'm sure bluepills have their... tensions aswell.
You think, as a bluepill, you automatically know how your life is going to proceed -- I'm sure there are enough blues with less money who are much more clueless about where they end up next day, or next night, than your average Zion mo... operative.

Maybe that's what Cypher had in mind when speaking with Smith? "Main thing I got enough money... being famous also wouldn't be bad" (paraphrased). He simply didn't want to get the sh*t end of the stick when being reinserted. Not ignorance is bliss, having a pleasant and comfortable life is bliss. Be it having money and status or playing in an Industrial band.

The Cypherites just frankly ignore all of this, which makes their whole attitude unbelievable one-sided, limited and bigoted. EPN is far more rational and mature than them, at least concerning their principals.