1) I agree that Mycroft and Sherlock let Irene go to get the punishment they thought she deserved. *shudders*

2) I think it's pretty clear that he's saving Irene. I've always disliked the end of SIB because of the enormous implications of Sherlock's actions. I think it's pretty clear that he butchered a bunch of men with a sword... This is kind of like the scenes in TEH with John beating him up, something the writers did for a lark without realising the more sinister implications.

Mary

Well, she wasn't entirely innocent .  I can accept this level of violence as presumably it was necessary.  A soldier might have to do something equally awful.  But maybe you're right, Mary, that the writers don't fully think about the implications and what it means for the character?  Had he ever slaughtered a group of people before?  It's quite a big thing ... but I suppose it maybe does reflect in later episodes. 

True!  Also, a reference to the pirate fantasy.

I meant the cutlass! 

You know, I was just writing that and thinking, I'm sure somebody will be able to tell me it's not actually a cutlass .  I know nothing about swords/arms.  But to the ignorant (like me), it does look a bit like a pirate weapon.  Even the outfit is slightly piratey.