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There is NO evidence to support that the world would end if the button weren't pushed. ... And what do we know about the island? It was a think tank for exploring various sciences. Psychological exploration certainly seems within the scope of what they would have been doing on the island. Global extension- doesn't seem near as likely.

There are several pieces of evidence that point towards at least something other than just a psychological experiment.

The first is the massive magnetic field in the bunker. We saw Jack's gun-locker key get affected by it, and Desmond says he can feel it in his fillings (which either means it's extraordinarily powerful or he has iron fillings). Could it be part of the psychological experiment? Sure, but I doubt it.

The other is the fact that while he was scared of the outside due to the sickness out there. While it may no longer be there, we have evidence that it once was, from a seemingly unrelated source. Of course, it might just be a massive Minbari conspiracy.
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Bitt Faulk