It is the duty of the "good guys" to do away with the evil, if that means balefiring them, so be it. It is not that Rand should keep the forsaken alive to slowly and painfully torture them to death because:

1) It does not satisfy anyone, the only people that would need such revenge are three thousand years dead. The people in the third age have only heard of such things, they did not see it, their parents weren't killed by Demandred's massacre. So is it really worth it to torture someone, thereby destroying one's morals and purpose in fighting against the shadow, to avenge people that died long before they were ever born. It is a question of duty. The good guys need to stop Demandred before he can commit another atrocity, not exact the justice of the three-thousand year dead.

2) As stated above, it destroys the purpose for which the good guys fight. They don't try to stop the DO because of justice, they do it to save the world, they do their duty to the masses. Publicly executing them would only have purpose in the AoL because people could satisfy the masses desire for the blood of the Shadow. "Here is the man that did so much evil to us. Now we kill them, look how powerful we are." It thereby has a purpose: increasing moral and making people feel happy.

So, whether or not Demandred deserves to die by being instantly balefired, it doesn't matter. All that matters is that those that fight for the light must do what they must do which is destroy the evil.

Of course, how is a person supposed to know what is good and what is evil any better than an animate sword?