Ngl, I never thought about this, and I don't know why.
You're completely right, he doesn't deserve to be redeemed, or anything other than punishment and/or death for all the fucked up things he has done to innocent people. Yet he receives none. Instead he gets to have a new family.
I think the problem is that there is no way of doing that, Kratos is a literal god killer, there's no way of enacting punishment upon him unless he accepts it willingly and he won't while having to care for his son. So instead you get this fucked situation where he gets to do anything he wants just because.
That being said, (while not remotely enough) he also regrets what he has done and is a much more nuanced character now, I just don't know if it is justifiable to keep him around. He can't be redeemed, and
spoiler
if the end of Ragnarök is where the series will go, Kratos will turn into someone that actually does good,
Still, I really want to see him turn into something else, I guess I'm too invested in the character. This shit's conflicting. 