I disagree to an extent. Punishing someone as an act to repair moral society is still treating them as a means to an end. Doing anything to anybody in the name of something that transcends their individuality (society) is always treating them as a means. Assuming that somebody must belong to your notion of moral society, (and should therefore be punished0 is ideologically fascistic.
State societies like we see today were not founded on dignity and respect, they were founded on population, coercion and ideology. Only primitive societies were not based on force, everybody was their own "cheif", no one could tell you what to do, conflicts were mediated, dangerous elements were exiled into their own space. To me this maintains dignity and respect.
Rorsharche for me represented a reversion into moral absolutism in order to cope with the horrors of nihilism. Remember (at least in the comic), that Rorscharche admits that what happened to the girl didn't effect him so much because it was horrific, that it meant the world was irredeemable, but instead, he realized that there was no inherent meaning in anything, which was the true horror. Think about the inchoate nature of his mask, the notion of the 'rorsharche test', gleaning meaning from the meaningless difference. His mask, while shapeless and in constant flux. is at least starkly black and white, and this is similar to the absolute differences he makes between good and evil. Valuations he makes in order to survive as an entity in a world of abysses. (see the nietzshe quote in the comic)In fact I would say Rorsharche best aligns with a nietzshcean manifestation.
He is heroic because is he able to see through the illusions of the world, pick his means of interpretation and have the will of conviction to see them through without compromise. What is heroic is not his specific morals persay, but the way in which he actualizes them.