Why do people keep talking as if Aang fighting/killing the fire lord is some sort of act of vengeance/blood atonement/venting of anger? Aang is defending and saving the world, and that's all it's about. The fire nation government and military are the equivilant of a mass murderer with a machine gun, the other nations are the equivilent of innocent bystanders at a mall, bank, school campus, or where-ever else a shooting may occur, and Aang is the equivilent of a cop forced to shoot him in the head to stop him from taking more innocent lives.
I cross-referenced atonement in 4 dictionaries and it's basically; making amends, reparations, compensation for a wrong action, repaying for something bad one has done. No way in a million years will Ozai in anyway atone or repent for his actions. Killing/imprisoning him is not atonement, as it isn't voluntary, it's not him making ammends. It is also not vengeance, since the motive has nothing to do with anger or 'getting even'.
Now you may argue that killing Ozai will not stop the war, in which case it's unnessacary, and that killing him is not the protection of innocent lives, in which case you may argue that it is an act of vengeance or "justice". One of the differences between revenge and atonement is that revenge is just causing suffering to get even, while atonement involves the wrong-dower actively giving back and making up for what he's done. Ozai's rotting, maggot ridden corpse doesn't give anything back to society (unless you use it to fertilize and plant a tree), nor does his starved, aching body sitting in a prison cell for all eternity. Making ammends would involve some sort of community service. However, I don't believe it would be safe (or realistic) to allow him to simply live among society as a peasant, or to make him do any form of out-of-prison community service, or to banish him. I don't think dethroning him will be enough. I think, for the protection of the innocent, his influence on society has to be completely removed with nil chance of him ever having influence again. This could be to through death, imprisonment, or even having his face ripped off by Koh, or some other means but it has to happen.
Besides, Hama is going to "rot in prison forever", the warden in the episode "Imprisoned" was thrown in the ocean and presumed dead, combustion man was killed, Zhao was taken by the ocean spirit and killed, do you foresee Ozai and Azula having a more lenient fate then these far lesser villains? Do you see a nameless prison warden in the 6th episode of season 1 having a worse conclusion then the main villain of the entire series, the guy behind all of this? Ozai's gotta go down in a blaze of epicness greather then any previous villain. Whether it's gonna be by the hands of Aang (most likely), an angry spirit, or bring about his own destruction in some form (lightning backfiring, taking his own life, burning down his own palace right on top of himself, etc.) , we don't know, but I believe he's going to fare at least as bad, if not worse, as Hama or Combustion man.