I would never judge anyone for the way they ended up treating Blackwall, but personally I just don't believe capital punishment is a solution. In this case I believe Blackwall has the character to live his life atoning for what he did, which seems far better than for him to simply die. Nor do I see that life as him simply "walking away".
That said, I think handing him to the Wardens would be the best of both worlds for me, there would be more accountability there assuming they let him go through with the Joining. Assuming he'd even live through it, of course.
Of course, I could also be a completely arbitrary judge simply wanting to see Blackwall live because I liked him. That's the danger of being the sole person to pass judgement, I suppose.