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I think the show is playing with the idea that it's a retelling of a true story, and in a true story the reasons some things happen can be unknown. They sort of put a button on that idea right before the UFO appears, talking about why Hanzee might betray the Gerhardts. I think the UFO is a deus ex machina to fill in the blanks in the "true" story, like why Rye Gerhardt wandered into the middle of the road, and how Lou managed to survive the massacre and how Ed and Peggy got away from Hanzee.
I definitely see how that could seem like bullshit storytelling to some people, since the story is actually fictional, but I kind of like it.
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