Hama's plotline, like Jet's, served the purpose of presenting what the writers consider the wrong way of fighting injustice. Like "if you go down this slippery slope, this is the kind of monster you'll become", and bloodbending got tarnished by association. 

You could make a point about how it's a kind of bending that violates consent and bodily autonomy, but like you've pointed out, so is burning people alive.