The previous few episodes introduced a few key changes within the season arc, as the lines are drawn and the sides are chosen. Doomsday is coming, Clark is leaving himself vulnerable without realizing it, and things are coming to a nice mid-season head. Chloe's current crisis, and Clark's resolution of it, set the stage for some serious repercussions.
Chloe's condition serves to drive three important plot points during this emerging "complication" phase of the season arc. First, while it was his choice, Clark has lost an important part of his support system. He may not realize it now, but Chloe was the source of a great deal of important information. It will be much harder to get that information if he's back to protecting his abilities.
It's also not clear how he thinks this memory purge can be sustained. Logically speaking, too many other people that know and work with Chloe know the truth about Clark. Chloe was fairly comprehensive about documenting what she was beginning to forget, and even without the brain boost from Brainiac, she's intelligent enough to put the pieces together. Even if Clark were to warn local allies to keep quiet, there's the inevitable moment when Lana returns and says something awkward, not knowing that Chloe has had her memories wiped.
So while this might hold in the short-term, it's unlikely to sustain itself in the long-term. As unfortunate as it is to have another memory-wipe plot element on the series, especially after the debacle with Kara last season, it could be handled well if the writers are willing to let Chloe realize what happened and react badly to Clark's decision to alter her memory without consent.
The second important plot point, also related to Clark's support system, is the restoration and subsequent infiltration of the Fortress of Solitude. It was a bit quick and easy, and considering how well the writers have been layering the story thus far, that lapse was glaring. But the return of Brainiac could tie in nicely to the emergence of Doomsday. Doomsday will no doubt desire a support system of his own, and Brainiac makes for a suitable candidate.
The third item is Davis' growing infatuation with Chloe. Chloe's inability to deny her attraction to Davis doesn't help. Davis is struggling to find an anchor in his life, and Chloe is rapidly becoming that touchstone. This is not good news for Chloe, because a situation like this cannot end well. Davis may respect Jimmy's existence now, but as he gains power and loses control over his emotions, how long can that last?
In fact, there may be a scenario in which Chloe's mindwipe turns out to be a tragic mistake. What if Davis decides to take Chloe against her will, believing that he's the only man worthy of her? Given his destructive tendencies, Chloe could end up in a fight for her life. Normally she would know who to call on for help, but Clark has erased the most useful knowledge from her memory. In such a case, Chloe would almost certainly be killed, and this could serve as the final impetus for Clark's decision to become the hero he is destined to be.