As a pattern the IslandMetaphor is used to increase the focus, to simplify the situation. That's the positive side. Negative effects can be e. g. an inefficient "reinventing the wheel", a group feeling "we against the world" or a reduction of the sense for reality.
US politics may also often be seen as an example of an IslandMetaphor in the sense of "we can solve the problems of the world, entirely by what we think, believe and do, on our own".