I have always supported the mages in both games, not because they are without fault or even the superior side but on the basic principle that it is fundamentally wrong to imprison and/or kill/tranquillise a person simply for being. Mages don't choose to be what they are and locking them away in a prison from which they can never earn release and are forced to live completely at the mercy of gaolers who loathe their very existence is both unduly cruel and disproportionate; it fails the most basic test of natural justice. It is collective punishment of the worst kind - because some mages have used their powers wrongly in the past, you are all declared guilty and punished accordingly without recourse to appeal or opportunity to prove that you yourself are capable of being responsible.
And, as we have seen, the Circle's invariably fail in their intended purpose anyway. The heavy handed way the Templars run them merely serves to exacerbate the mutual antagonism on both sides and drives mages to anger, despair, and subsequent desperate actions. As we know from the real world, people who feel powerless and desperate will often resort of to extreme, often self destructive means purely to strike back at their oppressors. The heavy handed way the Circle system is run guarantees that mages will turn to blood magic or become abominations if subjected to enough pressure. Push people down for long enough and they will invariably strike out at those they hold responsible for their suffering, even in ways that often ultimately harm their own cause. But maybe that is the intention of the Circle system? To create a self perpetuating cycle of uprisings and Annulments in order to justify the continued complete subjugation of all mages. The Chantry is certainly a devious, ruthless, and hypocritical enough organisation to do it.
In regards to the Kirkwall situation, I side with the mages based on the principle of Blackstone's Formulation - "It is better that ten guilty persons escape than that one innocent suffer". If anyone should die for the destruction of the Chantry it is Anders. There is no evidence that the mages of the Circle were in any way party to his deeds and so they should not be punished for them simply to assuage a mob. Unless it can be proven that every Mage in the circle conspired with Anders, killing them all is an affront the notion of justice. Personally, I don't even believe Meredith's justification at that point, she has been itching to annul the circle for years but the Grand Cleric held her back; once Elthina was dead, there was no-one to gainsay Meredith and her immediate response and the only action she will countenance is the Rite of Annulment. Her eagerness to do it and her unwillingness to consider any other solution suggests that this has been her preferred endgame for a long time. Of course, this brings up the question of the red lyrium idol and it's effect on her judgment, but in the end it hardly matters. In my own opinion, Meredith was unfit for command from day one. Her personal biases and experiences make her incapable of sound, detached judgments on matters regarding mages; people with such a pathological hatred/fear of another group of people should never be given power over them.
Now, having said all that, I'm not in any way against the notion of having the Circle as an institution of learning for mages (who do need to learn to manage their abilities), or of having Templars to deal with mages who do go rogue or become abominations. What is needed is for the Circle system to be reformed so that mages who prove that they can be trusted to use their powers responsibly can earn their freedom and actually live their lives (like Malcolm Hawke); voluntary ties like home, and family, and community are powerful motivators for good behaviour. Thus, the Circle would be more like a boarding school come university and less of a prison, and the Templars would become more like a police force, with less absolute control over every aspect of mages lives (stepping in only when serious incidents occur), and far greater accountability to ensure they do not abuse their authority.
Carrots work far better in motivating people than sticks, and as it stands, the Circle system is all stick, no carrot. That arrangement needs to be reversed so that mages are positively incentivised to learn to control and use their powers responsibly (and rewarded accordingly) and Templars are supervised appropriately so that they carry out their duties fairly and responsibly.
Carrots are good when you're trying to inspire people to go above and beyond but if you simply want someone not to do something, a stick works well enough. And when you consider that there is no carrot that will get all mages to give up their freedom, no carrot that will keep mages from seeking quick paths to power through blood magic and demons, the stick is the only viable choice.
Certainly mages fearing the Chantry will be pushed to do some extreme things but Thedas has many dangers and hardships. Bandits, thieves, darkspawn, other mages, abominations, enemies from other nations, slavers, petty lords, debtors, not to mention the general public which is leery of mages, templars or no. This means mages are going to find their backs against the wall and they will resort to blood magic and demons. Not all but some. Enough. Some may even turn to it as a first resort. After all not everyone is good.
And as others have pointed out, when you consider the evil that can be unleashed by one child barely able to cast a spell (as Jowan said),, the Circle is the only reasonable solution. The Kirkwall templars have gotten out of hand but the evils one Kirkwall templar can commit pale in comparison to a maleficar or an abomination or demon.
As for Tranquility being a fate that none would ever wish, I disagree. Consider what Wynne said about how even with her mastery the fear of possession was always present. Uldred succumbed. I think many a young mage should prefer tranquility over becoming corrupt or possessed.
And stripping emotions doesn't strip away what makes us human. Far from it. Animals have emotions. If anything we'd be stripping away something primitive and bestial in us, leaving people who don't fear, aren't jealous, can think rationally, don't resort to petty bickering, don't start wars. They'd make excellent judges, scientists, administrators, accountants, referees, and the list goes on. They'd see life for what it is unclouded by biases.
Personally, I as a human without a shred of magic in me would voluntarily seek tranquility if it existed.