Riodan was a fool. He says he was torture by Loghain and now he wants to save him.
Having higher priorities than personal vengeance isn't folly. And using Loghain for the Sacrifice wouldn't exactly "save" him. In fact Riordan believes the Sacrifice would not just kill Loghain. It would deny him any kind of afterlife. Not a fate to lightly consign anyone to.
We know beyond a doubt Loghain hates Orlesians yet Riodan lives. Something not right about that.
Torturing Riordan for information about the Wardens and what they are up to is consistent with Loghain's desire to believe that there is no true blight and it's all just a scheme to take over Ferelden.
BTW.My dislike for Loghain isn't a personal grudge its justice being served for his crimes against humanity and treason.
Of course it's a personal grudge. Yes, Loghain is a criminal. So are a lot of Grey Wardens as I've already pointed out. So are half your companions. The optimum criterion for recruiting a Grey Warden is "Is this is a person who would be useful, and who won't be a loss should he die just from drinking the cup." Loghain is good enough to be useful, and isn't likely to be missed by Riordan or the Warden (and more importantly couldn't be useful in any other way). His life is already forfeit. So going by the Grey Warden "whatever works" ethic, he's ideal for recruitment.
BTW..The Dwarf noble did not kill her/his brother if you follow the story line.
He might have depending on how you play him. But that's beside the point. Even if you're innocent, you've still been convicted of the crime, and Duncan has no way to know whether you were innocent.