I've had time to think about this episode and while I'm still mad, it was good TV. That said, I don't think the writers have dug themselves into a hole with Hook that they'll never come out of.
In the end it always comes back to Buffy for me. The end of that episode was similar to the Spike and Buffy moment in the bathroom. Rock bottom for someone who was on a redemption track. We've already seen evidence with Killian and Belle that he feels remorse for things he did. He needs to find peace. This moment is what will propel him forward to finally find that peace, just like Spike did after that horrendous moment.
S7 Buffy forgave Spike for the heinous thing he did before he finally found peace. Charming family and Emma will forgive Hook for the heinous thing he did when he was a different person. There are audience members who never forgave Spike and there will be audience members who won't forgive this. But in the end it's good TV that makes us feel something.
I'm curious to see how we get to the group forgiveness part. Maybe Hook ends up in a cave somewhere in the desert with Jafar and he goes through many trials to finally forgive himself and that's where he meets up with the Agrabahns again.
And I still don't trust August. He's a little too Gary Sue right now. Golly gee whiz here are the pages I found. There's something sinister about the smile and fake earnestness. Like Walsh before he turned into a monkey.