Tell me, in your experiance, and I don't doubt you've had it, in that experiance have you ever seen a stake that could restore humanity to a bloodline. Or vampires that couldn't be staked, or vampires for whom blood is not needed for surrvival but an addiction to be tamed. Have you known people you only knew as stories as a child, Snow White, Prince Charming, Red?
This world is not bound by any conventinal standard because of that Seal. Because of what its brought here. You cannot expect the same rules to apply. They might, they very well might and I could be wrong, but what if I'm not.
I said contain them. Its doable, we did it with Regina. We can give her her humanity back and she can feel guilty about all the terrible things she's done in the last...oh wait never mind.
Maybe Jerry will be horrified, but maybe he deserves a chance. Because if as you say this is a demon doing these things, something that took him over, clouded his mind, made him this, I suggest you talk to my friend Meg Masters about if she would like to have been given the chance to live when the demon took her over