For me, the symbolic importance of the algae island that has developed its own curious system of feeding its carnivous instincts lies in the larger question that runs through the novel, which is how we live our life as humans. When Pi discovers the truth about the island through the human molars that he first thinks are fruit in the tree in which he takes refuge, it is clear that he has to make a big choice in his life. The choice is made in the following quote:
By the time morning came, my grim decision was taken. I preferred to set off and perish in search of my own kind than to live a lonely half-life of physical comfort and spiritual death on this murderous island.
In a sense, we can view the whole novel as an allegory concerning how to live our lives and the way that so many settle for a "half-life of physical comfort and spiritual death" rather than truly, and much more dangerously, trying to live their lives as they were meant to be lived. The image of this island that slowly dissolves its prey over years is a fitting one when we think about the impact of a life led for physical comfort alone, whilst all the time the spirit is slowly dying.