Yeah, that's how I feel about it too. Even though he's done some bad things, he's a victim caught in between 2 worlds where he would never really fit in either one. He was a well treated prisoner, pretty much most of his life. He was raised with the Stark children, but like Jon Snow, he was never allowed to forget that he wasn't one of them. And even Jon had the knowledge that he was informally a Stark, and the kindness of his father (outside of Cat's sight) as a comfort. Theon had none of that.
When he goes home, he's treated like dirt because just the sight of him reminds his father of his failures and he was never raised there, so he reeks "foreigner" in his native lands. It's just sad. I think he never really had someone there to really raise him up to be a man. Ned Stark wasn't going to invest in his enemy's child like that, even though he was kind to him, and really there was no one else around who could teach Theon how to be a leader, so he had to kind make it up as he went and misstep along the way. I think his father sent him out with a task too soon without spending any time with him. And then the torture... It's just sad.
I hope someone catches Ramsey and hsi punishment ends up being his crimes. He's just awful. Sorry to write a book, but I just think those are things that shouldn't happen to anyone, even criminals. I'm of the belief that how we treat people says something about us. I mean, I thought Joffrey was really bad until I read about Ramsey.