I kind of felt this way when I got to the reveal too. It felt really out of left field, but in retrospect there is a TON of foreshadowing for this (see: a bunch of Reiner / Bert / Annie's dialogue during the parts the anime is currently covering, some of the events that happen when Titan!Annie is doing her thing, etc.), so much so that people figured out who they were months before the reveal. So although it seems kind of like an asspull it's definitely not. As for the method of the reveal, it makes sense given the context. Reiner's been shown to be cracking under pressure and is now wounded: he'll heal far too quickly from it and people will suspect him, so he is now under a time crunch. He also assumes (incorrectly) that Eren would initially be sympathetic to them, so why attack a potential ally? There's also the visual angle of the reveal: we're supposed to relate to Mikasa in a "what the fuck did I just hear?" sort of way. So while I'm not too fond of how it was revealed I think the way it was delivered was just fine.
As for everyone is titans: Yeah, I can see where people are coming from on this. Moments like the ending of episode four just aren't going to feel the same coming from Eren anymore; before he was this one guy ballsy enough to take on a monster taller than the world he's lived in his entire life, which is incredibly badass. Moments like these are going to have to come from the non-titan characters now, and those actions won't feel the same because they aren't the main character and don't have the relationship he has with the viewers.
However, I think humans -> titans is (mostly) necessary for the progression of the story. Without this ability I don't really see any way that the story doesn't end with human extinction given their circumstances, and without any opponents of the same caliber for Titan!Eren to fight, all his fights will boil down to "Eren stomps on about a hundred titans and then retreats", which gets boring really fast. He needs opponents on the scale of the Colossal Titan / Armored Titan, etc, and we need those opponents to have personality and motivations or it's little better than curbstomping a bunch of 3m-classes. Those titans having human sides makes this much easier. It also makes characters like Monkey Trouble, who have no confirmed human alter ego, more sinister because we have no idea what the fuck he plans to do since even the opposing human-titans are scared shitless of him. And on the survival-horror aspect, titan double-agents REALLY makes humanity seem fucked. So while I miss moments like the end of episode four, I think it was a necessary sacrifice for the progression of the story.