I believe killing Loghain is tactically sound, he's already proven he's ruthless and untrustworthy; you don't need to keep someone at your back who's far more likely to stab you in it.
"Ruthless" is, to put it mildly, fine with the wardens. So yes, the real issue is one of trust, not irrelevancies like justice or revenge. When weighing the decision of whether or not to offer Loghain the cup the questions you have to ask yourself are:
1. How likely is he to turn on you?
2. How much damage could he do if he does?
3. Can he be useful if he doesn't?
Loghain was led into his treason by an idée fixe, his obsession with the threat posed by Orlais. But he was and is a fanatical patriot and the arch-demon is a threat to Ferelden and he has reached the point where he finally accepts he was wrong and the blight is real. So while it's quite likely that he'd try to take revenge on the Warden he'd probably wouldn't do it until after the arch-demon was dead and the odds were much better than even that one or both of them would not survive the slaying of the archdemon. Assuming he lost the Landsmeet, then he poses no significant threat as a politician and noble. He has lost his position and his following. So he can either try for a rematch with with the Warden, that he'd probably lose, or he can hope to be remembered as a man who in the end gave his life for his country.
Still his value as another potential slayer is balanced by the chance that he could yet prove crazy enough to be a distraction rather than an asset in the battle. My Cousland actually chose to induct Loghain in the hope that an Anora who had not had her father killed before her eyes would be less of a miserable marriage partner to Alistair and would be less likely to murder him down the road. Raised as a noble and a politician, he does what politicians do, he compromises. This is not a concern for Riordan. So what is? What's the reason why in the toss-up between killing and inducting Loghain, Riordan picks "heads"?
Well there is one other consideration beside Loghain's own potential value if he can get his head out of his ass. Loghain's the only living person who know what happened to the last of the arch-demon's blood. If he's executed they might never find it. So inducting anyone else if they don't induct Loghain, isn't even an option.