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Chloe shouldn't have even thought about stealing that money, no matter how do you turn it.
Even stealing the stolen is a crime and inexcusable — stealing the money from a thief makes you a thief.
EDIT: Wacky conspiracy theory just came to mind: maybe it really was laundered bribe money, but once Wells realized that his office had been broken into and the money either stolen or very likely discovered (e.g., in a different position in the drawer from how he'd left it), he had to take immediate action to set up something in front of the dorms making it look like there actually were upgrades going on. Or, in a better light (and only in a "leave the money" scenario), he had a change of heart when he realized that the culprits could have stolen the funds but refused, and that if he didn't commit to using those funds for accessibility upgrades he'd literally be worse than a burglar.
EDIT2: I just remembered that, during the exchange leading up to the decision point, Chloe makes a rather curious remark that she would rather that Max stole the money and rewound (so that Chloe would never know) than that she actually, seriously leave the money where it is out of respect for property. It's said in a sarcastic eye-rolly tone, but I think she means it: her desire at that moment is not so much to have the money but that the money be stolen whether she herself profits from it or not - or at least a reassurance that Max is trying to stop her only out of self-interest at Chloe's expense (evil, but like a pirate) instead of taking the moral high ground by deferring to existing (oppressive, corrupt) power structures (evil, but like a top-hatted Victorian capitalist). She knows full well that Max would never actually steal the money behind her back like that, so her only purpose in suggesting it is to compare how much worse she considers leaving the money to be.
This is not the behaviour of someone who's trying to grab the cash, but someone who earnestly wants an ally to fight The Man.
I think that's really what it comes down to; it should be pointed out that--Chloe's talk of a road trip aside--Max's primary motivations for allowing Chloe to steal the money include:
1. She wants to use it to pay off Frank
2. She's seen enough by this point that she doesn't mind screwing over Blackwell
With Point 1, we get the very real desire to keep Chloe safe at any cost; the money is Max's protection of Chloe vs. Frank.
Yet Point 2 is potentially even more interesting and compelling, for a number of (sub) reasons:
2a. The line in question from Max's Diary reads:
This definitely points to a growing amount of cynicism on Max's part, something that's only natural at that point in the game, after Kate's (potentially attempted) suicide and everything that led up to it.
2b. Prior to heading into the Dormitory in Episode 4, Max can talk to Ms. Grant outside. During the ensuing conversation, Max can deliver the following line:
This line is extremely important, not only because it once again shows us how much more cynical Max has become at this point, but also because it's an open acknowledgement by Max herself that Blackwell Academy isn't the "dream school of the arts" that she thought it was. Both as a result of spending time with Chloe and from witnessing events firsthand, Max is slowly watching the illusion of Blackwell's prestige melt away, revealing the ugly reality that lies beneath.
If you really wanted to look deeper into it, you could even argue that it's also a total setup for Max's later learning the truth about Jefferson, as well--the final betrayal of the "best years of her life" myth, which Max even acknowledges in her diary as being a load of BS after she and Chloe discover Rachel's body and go to the End of the World Party.
This adds a whole new dimension to understanding the way Chloe talks to people in LiS.
1. Chloe and Max could use it to get Frank off their rear, which could keep them safe and allow them to give Frank some incentive to spill everything he knows about Rachel. If stealing the money could ultimately lead to finding Rachel, then having that money in Max and Chloe's hands is ultimately for a good cause.
2. This is the Prescott-backed Blackwell we're stealing from. 5,000 dollars is pocket change. Easily replacable. I thought about it, and figured "Realistically the Prescotts could have a new envelope with a new 5,000 dollars in here by morning.
3. You have to remember that at the end of the game, a storm destroys Arcadia Bay. In the long-term, it turns out that giving Max and Chloe five thousand dollars (or two if they pay off Frank) is a great way to help them stay on the road for as long as they need to to get wherever they need to go after the game.
Overall, it's wrong in the moment but works out in the end.
1. It's that exact utilitarian analysis that ends with sacrificing Chloe.
2. I looked up a longplay and saw just how Max gets around merely being a Lawful Stupid wet blanket in her response. It ties together so many issues underlying this choice. I had grossly underestimated LiS's writers on this one.
3. There's no in-character knowledge that Blackwell would be destroyed, no certainty that the fund was fake (and later it appears it was not), no knowledge that they wouldn't get caught or that it wouldn't contribute to their chances of getting caught in the first place, no knowledge that they wouldn't get caught with the money and thus unable to pay off Frank anyway. Now that I think about it, as an in-character self-destructive gamble the reasoning behind (not) taking the money resembles the reasoning behind (not) Sacrifice Chloe a lot.
This is definitely one of the ones where I could go either way, though.
(This and now also siding with David the following morning - him redeeming himself with a proper compliment of Joyce's cooking is already worth it alone)
Also I like using that choice, too. As much as we all love Chloe and want to defend her, it's still nice of Max (if you take that choice) to realize that David just wants to keep everyone safe. Even if his methods aren't perfect.
Now that I've read a lot more about this game and its universe, you could argue that Arcadia Bay was a rotten pile of trash from the start - and Rachel, Chloe, and even Nathan were victims of it. Max escaped the decay. One could argue that bringing the Prescotts and Jefferson to justice at the expense of losing another to Arcadia Bay's corruption is not worth it. One could argue that wiping the slate clean by bringing the Prescotts to justice and destroying their life's work, is a good way to clean Arcadia Bay out from the inside.
Breaking into Frank's RV is Max's idea, and she even has to do (a little, but not zero) convincing to get Chloe in on it.
The whole story makes a lot more sense when you play the game assuming they're much closer to each other in underlying mentality than we tend to flanderize them in our heads.
EDIT: new headcanon: Chloe is at least as uncomfortable with this as Max is (or might have been) with the school break-in and that's why she's willing to spend that entire time awkwardly fumbling around in a garbage can.
Then again, if he'd asked Max what had happened after the fire alarm went off and paid attention, maybe they could've nabbed Nathan in time to replicate the entire Sacrifice Chloe ending without the "Sacrifice Chloe" part...