If they use the matrix inside a matrix, wouldn't that be like writing yourself into a corner, and you use that "cop out" to escape it, forgot what the term was called.

 

Think of the Matrix like Windows 3.1, 95, 98, etc... and Zion as DOS. You can still access Windows programs from DOS, it's just not everybody knows how to do so. They don't necessarily crash the Matrix, they just upgrade it and deal with the program conflicts. Now that Agent Smith has the idea... think of him as the evil version of Neo.