My biggest problem is the same that the Divine brought up in Asunder. These are people who didn't choose to be what they are, and in return, out of fear, we lock them in a cage. Worse, we lock them up and only release them to do our bidding. "Make an unwavering light", "heal x, y, z", and then, we lock them back up. The Divine said it herself, that's slavery. Pure and simple. And I do believe ethics should come into play here, because these are people. People, who both have something to add to society and take away.
My belief? The Circle should be the equivalent of a soldier's boot camp. A boarding school that acts as a training facility from about 10 years of age to the end of training. The Harrowing should be extended, i.e. if you fail once, you are permitted to try again up to three times, three failures result in Tranquility or death, to be chosen by the mage performing it. Learning only occurs through practice after all. Once the Harrowing is done, mages must continue a specialization course (not only combat specs, but healers, diviners, enchanters, etc), and then they graduate. At this point they may rejoin their families, and continue on with their lives.
The tradeoff? Families must visit their mage members at the circle during training if they wish to visit them at all. Blood magic's penalty is death along with any other crime that would result in capital punishment, other crimes' result is Tranquility (or death if considered preferable) instead of jail time or dedicated work in a mage field for the government (similar to parole) instead of community service. Phylacteries are blood magic and banned, as the Chantry should lead by example.
Templars answer to a code containing these rules, and any problem that does not interfere with the code should be brought up with local rulers.
Mages are permitted to send letters to family and friends from the Circle.
Is this perfect, as in, result in no abominations or malificar ever? No. But it is an ethical solution that will result in less overall, and Mages themselves will end up hating, rather than secretly idolizing, those who do not obey, as it makes life worse for everyone, especially since there is a way out.