To some extent, we should humanize bad people, because bad people are all human, and some ordinary-seeming humans are bad.
When bad people in media are only portrayed in media as stereotypical villains, it's harder to detect bad people in real life. Bystanders see a gentile, caring, vulnerable person, and they immediately assume they can't be bad, because "bad people aren't gentile, caring, or vulnerable"! Except they are, just not always.
Also, at least some people deserve a chance at forgiveness. When evil is only portrayed as black-and-white, even tiny accidents cause someone to be irredeemable, because "bad people can never do right" implies "good people can never do wrong".
That doesn't mean we should forget bad deeds and eliminate all punishment. Accepting people can be good doesn't mean unconditionally forgiving them, and forgiving =/= forgetting. Like, if Elizabeth Holmes founds another company I'd be very skeptical, and if anyone seemed to trust her I'd actively refer them to Theranos. But specifically in online discourse, moral polarization is one of the biggest issues I see today.