I thought the idea of a Luke haunted by his failure and struggling to cope with it was great because it humanizes the character.

What wasn't great was the execution of it all.

Ben Solo had darkness in him to begin with and Luke did everything he can to try and erase it. What happened that night was just a moment of weakness, not an active attempt at murder, but enough to make Ben think Luke wanted to kill him, and thus led to the creation of Kylo Ren.

Luke has never been a perfect Jedi. He made use of the Dark Side in Return of the Jedi, force choking enemies and using aggression to win his battle against Darth Vader. What made him ultimately the hero was bringing Anakin out of Vader.

And when did Luke see good in Palpatine? I don't recall hearing him mention that.