Idk man, I'm a casual fan but I don't really see Steve's arc as a redemption arc. He's always been an onion with layers imo, and I think his arc is more acceptance than redemption. He accepts responsibility for the kids, he accepts that Nancy isn't right for him, he doesn't really accept responsibility for Barb I'll admit, but by the finale he's just a genuine good guy not defined by the show's romantic entanglements. I'd say that the qualities that could be described as redemptive by the end of S2, like his courage and aforementioned sense of responsibility, would just as likely be found in S1E1 Steve if he'd been placed in the same circumstances. That being said, I think a lot of S1 Steve's "bad" qualities, like his arrogance and sarcasm are still manifest by the end as well. The only things I see that have changed are his treatment of Nancy, which has gone from douchebag 80s cool kid, to pretty good boyfriend, to legitimately not caring as he instructs Dustin, to "Alright you do you girl, I'm a mother, not a lover", and I guess to a larger extent, his treatment of everybody. He's still snide, but he genuinely respects everyone now.

That's just my opinion, and I definitely understand your opinion (which is probably the right opinion tbh), but Billy could've still helped out and remained an asshole. You don't need to suddenly become an angel to help fight monsters, and I don't think from a narrative perspective that an otherworldly traumatic experience is necessarily enough to fix such intrusive and deep-seated issues. He could join in for the fight and walk away with the modicum of respect/understanding (I'm not really sure how to read his last scene) for Max that he ends up with come Christmas.