I'm sorry but I don't see killing the karlsson daughters/everyone as evil at all. A 'revenge/re-education' scenario where you just do the same fucked up shit to them wouldn't be satisfying or even morally better because in the end this is just continuing this whole abusive concept of treating humans like trash. Besides I find it funny that the game can even prescribe Kane to be 'evil' or 'good' when he clearly is coerced throughout everything. The game has a problem where it refuses to decouple choice taken with personal preference. It somehow tries to imply that the character must find enjoyment in picking fucked up choices when it could be simply nothing personal and just trying to expedite getting out of a situation where he is a literal slave.
Circling back to the daughters though, These creatures have clearly little regard for human life to the point that its a lost cause to try to even re-educate them. I highly doubt re-education with the same fucked slavery/humilation crap would even teach them that this is fundamentally wrong. Regardless, Even in real life, Many countries don't want to re-integrate people that have raped and killed children/women/people into society.
Ideally, an ending where Dr.Kane prescribes everyone a slow beheading is preferable.