I dont know much about Saddam, so its actually not right on my part to comment. But with the knowledge of what I have I feel that punishment was right, probably life imprisonment kuduthurukalam. I know you are not justifying Saddam's act.. and i also understand the way you said he was good for his people. Something like Namba Nayagan padam style "Naaalu peru nalla irukanumna enna vena pannalam" . Whether it is Nayagan or Samurai or Ramana or Anniyan... all of these examples show the main char as killers, but they do good to common people by eradicating the bad ones. Ramana movie shows a very good example that PUNISHMENT shoud be harsh and Vijaykanth accepting death sentence himself was very good.
From the news what i heard, Saddam was the main reason for killing 148 shiyads in IRAQ. I dont think all the 148 people were bad ones and infact most of them should have been innocent which is what makes saddam as a villain. So arresting him was right but again like i said earlier whether hanging him is justice or not is a different question. If what saddam did was wrong, ofcourse what Bush did was also wrong. As per his orders, US invaded Iraq and many innocent people got killed. That way even he should be punishable.
Another question which I have is : Punishments are actually for the guilty person to realise his mistake. Do we really think in those angles while giving punishment or is it just to satisfy our own anger/revenge on the person ???
Check out all about Saddam here :- http://en.wikipedia.org/wiki/Saddam_Hussein