Well, no surprise that you disagree with me...
To your points. First, King hasn't written Wally before but in his most recent interview on Wordballoon he made it clear just how much he loves Wally West as a character. I do understand ignoring that and judging him purely on his work but the only time he has written Wally is in a story that is specifically tailored, by the nature of its genre, to mislead the audience.
Second, fair point that Sanctuary has been a failure but that still doesn't mean he isn't trying to work through his trauma, which is the crucial point here. Going to a bad therapist while dealing with your issues may not help but teh very act of going means that the issues are being addressed. King is too smart not to know that.
Your final paragraph has to do with plot machinations and you may be entirely right. I don't know. But this is superhero comics so King has plenty of leeway to go nuts with the final revelations. He may well completely screw the finale up, don't get me wrong, but that doesn't mean that Wally won't come out of it better than when he came in.
Finally, my biggest issue with what you wrote is the whole idea of Wally not being a hero defined by tragedy. You're right about that but this change happened before King got his hands on him. Both Wally and Barry have had tragedy shoe-horned into their story, both by Geoff Johns, and it doesn't fit. Still, it is what it is and Wally is stuck having to face the eradication of his wife and kids and though I don't like this change to Wally any more than I like having Barry dealing with his mother's death and father's false imprisonment but it is where his character is right now and, for the themes that King is trying to explore, he is currently the perfect character to spotlight in a series about something like Sanctuary. What this means for Wally post-HiC is impossible to say, but even though the story is two-thirds finished, there's no reason to assume that King is, in any way, actually out to get Wally or to turn him evil.
Though, one thing, I'm not aware of the story where Wally goes to therapy to deal with the loss of his wife and kids. Which series was that in?