Having them mind wipe someone to forget secret IDs doesn't bother me, because it seems more like self-defense.
Mindwipes to try and change someone's personality, a little more difficult to justify.
I think Dave makes an interesting point about the fact that Dr. Light might have suffered more in prison. Especially, if the rest of the population was led to believe that his actions had led to, for example, a JLA crackdown on rogues.
I also think that Killconey is right to question, however, whether the PZ is an option in the retconned DCU.