I never looked into these lyrics quite like that, but I wouldn't be surprised if that was the case. Everyone seems to be taking Mike's lyrics to literally and not giving a deeper meaning or a metaphorical meaning a chance. I also believe Mike had a lot of ambiguous meaning in his lyrics, so you have no choice but to look a bit deeper.
In my years of listening to him and learning about his life, I've always found tidbits of songs to be extremely autobiographical or that the songs could have multiple meanings. Take "Who Is It" for instance...
The song is about a woman, a relationship gone awry. I would not deny that, but a few parts of this song have always stood out to me as deeply personal
I Am The Damned
I Am The Dead
I Am The Agony Inside
The Dying Head
This Is Injustice
Woe Unto Thee
I Pray This Punishment
Would Have Mercy On Me
To me, that has always been about more than the fact that "she found someone else"
The same could be said for "Is It Scary." On the surface its a song about ghouls and ghosts ala "Thriller." If we take a deeper look at some of those lyrics, its obviously about himself and the hurt he's felt from people. Its like "You guys keep saying all of this shit about me, fuck it, I'll be that person if thats what you want"
I'm gonna be
Exactly what you wanna see
It's you whose haunting me
Your wanting me
To be the stranger
In your life
Am I amusing you
Or just confusing you
Am I the beast
You visualised
And if you wanna to see
Eccentrialities
I'll be grotesque
Before your eyes
Let them all materialise
I agree that with many songs you could try to hard to make song lyrics into something else. A song such as "Blood on the Dance Floor" seems to have enough drug references to warrant that discussion. Actually reading the lyrics, I would agree that their is a deeper meaning with this song. Couple that with the timeframe in which it was written and released, I would agree that something more is being said that "that bitch is crazy and has a knife!"