I feel sorry for Khan. They made him a bad ass, but they didn't sell the war criminal, genocidal madman side of the character.
Perhaps not, but that side was still there. Just because Khan was being forced to work for Section 31 does not make him a good guy. His very nature prevents him ever being that. Put all of the rest of the Augments into cryotubes and Khan is still as evil as he was before that. Nothing Khan ever did in STID justified his prior crimes or erased the memory of them.
It would be like a convicted serial killer, on death row, providing information to the police. That doesn't magically cause that person's crimes to vanish. It doesn't make them good. Some people are just evil for evil's sake, and always will be. Khan clearly held no remorse for any of his crimes on Earth (indeed, he fully admitted he would RESUME his work if given the opportunity), so why call him good?
As far as I'm concerned, Khan DESERVED everything he got. He deserved to be a tool of Section 31. Remember the Eugenics Wars - Khan and the rest of his ilk tried to take over Earth and exterminate anyone who wasn't a genetically engineered perfect being. I find it a fitting punishment that he is forced to work for the very people he tried to destroy - and would still try to, if he could.