The Glass Eye was a particularly powerful object that was sought after by many object collectors, namely Karl Kreutzfeld.
The Eye's power was to repair or destroy all flesh. It was locked away in the Collectors' Vault as it was perceived to be too dangerous and might fall into the wrong hands. It is thought that the reason for the Eye's awesome destructive and healing power is due to the price that must be paid in order to use it, as it must be inside the eye socket of the user in order to work. Karl Kreutzfeld, the one and only known owner of the Glass Eye, paid this price and installed the Glass Eye into his eye socket after cutting out his own eye in order to do so.
He then used the Eye to vaporize an entire strike team of Legion Members, but it seems as if the Eye responds to only the tiniest command as on several occasions he accidently vaporized some of his own men. The Eye disappeared inside Room 9 with Karl when he attempted to recreate the Conroy Experiment to bring his dead son back to life.
Presumably, the Eye went back to its original place in The Room when the attempt failed.
The Eye was a right eye. When he was found, the original Occupant wore a black eyepatch over his right eye socket. Which was the same side Kreutzfeld installed the eye in. How he knew to do so is unknown, but he did have a 50-50 chance of choosing correctly.