Which leads me to this – is a bad, even terrible, thing that is done for the right reasons, still a bad thing?
I feel like that is the ultimate philosophical question for ONCE. Case it point: Rumple. He did a lot of terrible (truly terrible) things but in the name of parental love. Snow White told a secret she was not supposed to tell, but did it in service of saving Regina from losing her mother, an experience she knew all too well.
A running theme of the show has always been: desperate souls do desperate things. And sometimes desperate souls do horrible unspeakable things. So, if Blue isn’t an evil puppet master then I think there is something horribly traumatic in her past that makes her so rigid and cold and do the things she does. I have my own head canon which is that she was once in love with a mortal man who was dying. So she enchanted a dagger and stabbed him in the heart but all magic comes with a price and he became the first dark one. This trauma leds her to demand that no fairy can love.