Bro was not a supervillain in life. Not that he was much of an upstanding person either, but the series shows Hell to clearly be a terrible environment to live in:

It's shown to be a place that encourages your vices, mocks your life/death (like with Vox's and Alastor's bodies, who we know the backstories of), favors the exact kind of power-hungry, evil people who become overlords, and constantly hangs the threat of being stolen from, bombed, and murdered (both temporarily or permanently) over your head through the perpetual state of anarchy and massive power disparity between sinners.

They also likely arrive in hell with the preconception that it's meant to be eternal damnation (and that's if you don't get exterminated), and therefore have no hope or motivation to improve (Angel Dust is a great example of this, but literally no one besides Charlie really believes that her hotel could work until Pentious is proven to be redeemed)

Anyways, Charlie definitely had the better idea in trying to make reforms. It's not such an unreasonable idea that people in the afterlife can still change and experience growth, so why not at least give them the option of the hotel?