The ending of ATLA is kind of a mess anyway, even if you want to say that lion turtles out of nowhere don't count as an ass-pull because the idea got fleshed out five years later.
I mean, season 3 of ATLA is all about shades of gray. A whole bunch of episodes are about the way war compromises people who started out as unambiguously good ("The Puppetmaster" and "The Southern Raiders" are particularly notable). Obviously it also spends a lot of time trying to show that there are real humans in the Fire Nation besides just Zuko and Iroh, and that even Sozin didn't start out so bad. From the very start of the season, this is all clearly leading up to Aang having to choose between his duty as Avatar and what he feels is right.
The lion turtle is intended to be a way for the show to totally punt on this. Aang has a dilemma. It's the central dilemma of the season and perhaps of the series. And then the lion turtle short-circuits it by offering him what's presented as an as-good-as-killing solution to the Ozai problem with none of the guilt, without any of the characters even having to do any work to get there.
Worse, Aang should feel guilty - what he did was monstrous, by his own lights. Killing Ozai might have been more merciful. It's obvious even in ATLA that, for many benders, bending is an important part of who they are. Any of the characters we get to know would be devastated if they got spirit-bent. Toph is obviously a bit of a special case, but her losing her bending would be clearly worse than anyone else losing their eyes. The Legend of Korra makes this dynamic pretty clear - in season 1, people who lose their bending are basically dead men walking. Several people seem like suicide risks. So the lion turtle fails to actually punt on Aang's dilemma - it's worse than that, because Aang ends up choosing the Kyoshi approach without intending to choose.
Finally, season 3 of ATLA makes clear on a few occasions that imprisoning powerful benders is thought to be perfectly feasible. Nobody is particularly concerned about the prospect of keeping Hama or Iroh in prison, although obviously they both escape once. There's a two-parter which is all about a major Fire Nation prison. In the finale, Katara captures Azula (without the benefit of the Avatar State, even) and she's presumably locked up somewhere rather than executed or spirit-bent. Meanwhile, Aang successfully renders Ozai harmless, and only then does he spiritually torture his enemy.
Also the kiss is way creepy.
Ooh, a good post challenging TLA, always love these.
Right, so as far as the moral theme goes, war is something that compromises people who are good....but only if it lets them. The choice to be good is always within a person's reach, even among the most difficult situations. The Puppetmaster is an episode where Katara fails to make that choice(Both katara and hama view the end as katara's defeat and hama's victory, despite hama being the one who is being dragged away), but in the Southern Raiders, she doesn't kill the man she wants to. And another example would be The Painted Lady, where the Gaang helps this village being abused by the fire nation. There is really no advantage they gain to helping them, and they should really just go on their way to do 'more important' things, but Katara specifically makes a stand that they are going to stay and help people, fuck pragmatism.
This is the moral that Aang went through with Ozai. The entire world was telling him to do something he believed to be fundamentally wrong. Something he considered would damage him and the way he lead his life. Iroh made a point that he could, potentially, be the one to kill Ozai, but the world would just see that as another case of power trying to be seized. Basing his plan for world peace on a murder is something the world also might see in a similar light. It's not easy to stand up for something when the whole world says to do something wrong. That's difficult. And the way that energybending works, as out of nowhere as it may have come from, supports this. You cannot bend another's spirit unless your own is unbreakable. If Aang was not as resolute at he was in his belief that killing is wrong, energy bending would not have happened. That is a very good moral for kids to learn: Even in the darkest moments, do whats right.
As for if spirit bending is worse than murder, I find it preposterous. The nonbenders of this show are immensely capable people. Bending can be a part of who they are to a great degree, but I liken it to losing a limb or something: people can live and continue accomplishing great things, including the thing they used their now lost limbs for, without them. Lose your legs, and you can still run a marathon. True, it's not a good thing to do to people, but it's also not a good thing to deprive them of their freedom and throw them in a jail where they cannot participate in society. In the right light, that can be worse than death too, but they have to do something when a criminal element poisons society, even if they don't want any harm done to the criminal. Aang is not opposed to never, ever doing people harms (there are monks like them, but Aang believes in violence being the solution when all others have failed), and this fits in to that. Aang just doens't believe in killing, but taking bending away, while still not a nice thing to do, is preferable when it's the only option.
That said, I do have my own little pet theory of how energy bending works, and it could concievably be worse than murder. If fire bending comes from a person's drive, then energy bending must take away that drive. Energy bending must be the art of changing who you are as a person. Essentially, imagine if someone could reach into you and just twist who you are, fundamentally as a person, into something different. If you love your girlfriend or wife, someone can energybend that into indifference. That is death of whoever you are, just a replacement for who you will be. In this case, Ozai would not be able to come back, since his drive is gone, and he would have no motivation to do anything, bending or not. But that's my own pet theory.
As for imprisoning them, I think you kind of defeat your own argument when every one of the people you mentioned has escaped and wreaked havok. But I don't agree that Ozai was similarly imprisoned. Aang held his hands for a moment, but Ozai has been powering through rocks all day. He didn't that moment because he had Aang right in front of him, so he tried to burn him using his fire breath immediately. Could Ozai have been captured? Eh, conceivably, but he'd be able to challenge the throne at any time, and given he is still the most powerful bender in the world, and that as a political leader he would be able to maintain control over the country, he had to be permanently dealt with to some extent, if only symbolically. Being put in jail is a temporary solution in the avatar world. Azula wasn't in the same boat, since the country didn't have loyalty to her in particular, and she was to be rehabilitated in any case.
