This Alternate Metroplis is part of a series of splintered Paradox Realities that have resulted from The Council's tempering with the natural timeline.
Due to the conflict between the Council of Batman and the Council of Luthor and their employment of New Heroes and New Villains to alter key points in time, the reality is in constant flux between a virtuous state of idealism and a corrupt state of oppression.
Alternate Metropolis occurs in the Brothers in Arms operation.
This alternate timeline is in a constant state of flux between good and evil. This is because the heroes are preventing the evil timeline while the villains are preventing the good timeline, which causes both to stop existing and allows the true timeline to exist.
This version of reality came to exist when the heroes prevented Kal-El to be exposed to red kryptonite as well as programming his ship with the additional goal of guiding Lex Luthor. As a result, Superman was somehow able to steer Lex onto the side of good, removing his evil influence from the world. It is unknown how far reaching the consequences of this change were, but Metropolis greatly benefited and it can be assumed that the world also did. This timeline was prevented when the villains changed history.
This version of reality came to exist when the villains deleted the extra objective to guide Lex Luthor from evil, which was in Kal-El's ship, and exposed Kal-El to red kryptonite. As a result, present day Superman has been corrupted into Lex Luthor's loyal ally. Without Earth's greatest hero, it can be presumed that Metropolis wasn't the only place to suffer, thought it can be assumed that it suffered the most.