Its always going to be difficult to do ethics in videogames where for the longest time, the goal is to kill bad guys until theres none left, at which point you win the game. So I agree with you in the sense that its not an easy thing to convey moral conflict in games where you cant go anywhere or do anything without killing loads of people first.
Thus distinctions are made. You kill faceless combatants and moustache twirling villians. Thom's company kills civilians and children. You say you do it for some greater good and it normally ends with you achieving that greater good anyway. Thom says he did it for money. You operate openly under your own identity, ready to face the judgement of a fictional society (which will never actually condemn you because you are the hero of the story). Thom flees and lets his company face retribution. He assumes a different identity to escape the judgement of this fictional society.
So we arrive at a weird place where the act of killing isn't what triggers moral outrage. Like you say, your character kills hundreds of faceless red shirts - so many that its just normal, which is a disturbing thought in itself. With Blackwall, I would argue that its the cowardice and deception that triggers moral outrage. It is his willingness to atone that triggers moral conflict. What do you do with a dishonorable man who is trying to be honorable? Ultimately, most players will probably choose to give Blackwall an opportunity for redemption so they can keep the best tank in the game. Thats ethics + videogames in a nutshell really.
So yeah, its all over the place. Its illogical and morally inconsistent to the point of a double standard. Its also quite a common method of excusing violence in entertainment. I would really like to play a narrative focused game that asks very difficult questions of the player and which present moral dilemmas that have no easy or feel good solutions. Where you must take a logically consistent ethical position and live with the consequences of it, however bad things end up being. Sort of like Naked Lunch - The Game. But this sort of thing is not very marketable or popular, which is probably why game narratives tend not to go there.
I like this. I read it a couple times because it gave me some more thoughts.
It is a double-standard: I would just still feel quite ridiculous to get all righteous over what Blackwall did. I tried out the conversation options that condemn him ("You're nothing but a murderer!" "*I* would never do anything like this!") and I was just embarrassed hearing myself say those lines and wanted to punch my Inquisitor's self-righteous hypocritical face.
I get the personal nature of the lies and the betrayal is the infuriating enough part all by itself. But again, not like the Inquisitor is always straight up. Doesn't really go out of their way to tell people that it WASN'T Andraste in the Fade, regardless of what conversation option you pick. Also has the option of lying to Cassandra about a simple background question FOR NO REASON.
No knocks on Blackwall from me for him doing it for the money, either. Maybe it's just me, but I kill those poor red shirts all over the place just for the experience and to loot them for money. They probably have sob stories and kids of their own who will now starve without their providers, but we don't care, lol. Heck, those bandits' back stories are probably more sympathetic than the Orlesian noble family that Blackwall killed--We all know what wonderful people that bunch is.
NOT saying those kids deserved to die or anything, but I thought that was just what happened in a power struggle... Blackwall DOES think that Gaspard should be the emperor, doesn't he? I mean you get approval from him if you support Gaspard. So how was him taking that hit job against the agent of Gaspard's enemy a betrayal? I think it's more like him just doing his job. The way it works is the Orlesian military doesn't necessarily care who's on the throne and they just obey their commander (according to Cullen). So Blackwall supporting his commander by taking on a job to whack one of the supporters of his commander's enemy...WITH OR WITHOUT BEING PAID, that sounds like par for the course to me. I find it very odd that he felt so bad about it being treason--Would've made more sense if he thought, yeah technically it IS treason against the at-the-time official ruler of Orlais, but I was faithfully serving the person I've always served.
What realistically would have happened is even if he wanted to spare the kids he would've been ordered to kill them. To use a Chinese saying, you must kill weeds at the root. Same reason I found it implausible that Cassandra and her brother were spared from her family's punishment for treason towards the king. To tie up loose ends--e.g. kids growing up hating you for executing their family and coming back for vengeance--pretty sure they would've also been killed. The uncle too. Yeah they DIDN'T grow up hating the king but the king wouldn't have known that at the time and would've had no reason to take the risk.