I for one do understand Nuwa's predicament when she locked away the "demons", but at the same time I feel Long You has every right to be super-pissed about it. To be honest, I feel that most of the Mt Shu sages - here and in other stories where they appear - are incredibly (and annoyingly) obtuse and they would rather kill or punish before asking any questions - even if the "evil one" has been created by constant bullying and such at Mt Shu. 

What do you guys think?

Shu Shan is a sect that is highly respected for vanquishing evil. Which is why most of the people there act like their so superior. They do abuse their power and authority at times in this drama. However, considering that there is a strong hatred between the demon realm and mortal realm, it's understandable that the Shu Shan disciples have a mind set on all demons being 'evil' or a threat. Because demons honesty have the ability to harm humans at wish, so far most of the demons they've encounters in the mortal realm aren't the friendliest.
Plus, they're probably to proud to admit their mistakes of harming an innocent demon or truly being sorry for it but I think they would so something to take responsibly for it, if it was very serious.

I do agree with you, and I understand their role, which is very important. But they often make the mistake of pushing people they deem as dangerous/undesirable into evil through bullying and provocations. I guess the uber-righteous (or people seeking advancement) use events not only to promote the status quo (and prove that those people are "evil"). I for one cringe a bit whenever there is a group (fictional or not) who claims to be the ultimate arbiter of right and wrong, especially if it's based on impenetrable doctrine (or indoctrination?).