But entire cities were obliterated by balefire in the AoL and its use was much more widespread at before it was 'banned'. Rand's obliteration of the palace was a much smaller scale, IMO. The power involved, I suppose, is an issue for concern. I don't view it as an atrocity in those terms because he didn't destroy the pattern - a potential atrocity only.

In Rand's mind, the only way to kill any of the Forsaken from now on is by using balefire. The DO has few enough weaknesses without exploiting this one. His not caring about the consequences is either measured or due to the fact he is using extreme measures in desperation.