No. Dr. Strange did NOT just do that.
I'm not usually one to nitpick a book to bits and let one out-of-character moment destroy the whole issue for me... but this issue has a DOOZY. Jaw-on-floor whopper. Complete and utter betrayal of all we hold near and dear of our heroic ideals. It's not Captain America or Spider-Man who do it, but even though it isn't Boy/Girl-scout #1, it's still something that should NOT happen. The Punisher could do this. MAYBE Wolverine. MAYBE certain 90's era soldier of fortune types like Deathlok. But not Dr. Strange. Anyways, I'll get to just what precise act it is at the end of the review after looking at the positives.
The Norman Osborn storyline, spread between here and the regular "Avengers" title is still going relatively well, though it's a bit more interesting in the other book. It's just a matter of different levels of severity. In "New Avengers", it's like Osborn is just out to humiliate the team whereas in "Avengers" he's out to utterly destroy them and leave nothing left. So there's a lower level of severity here, though the more human drama that creates does allow for a strong character moment involving Luke Cage being denied his civil rights.
The main other strength of this issue is an understated scene in which Norman Osborn, flying without the aid of his glider, conducts a business call while hovering over a destroyed landscape. It's just a very strong visual, all the more-so due to the fact that we still have no idea why Osborn has real powers (and seemingly hefty ones at that). This page, while not the most pivotal in the issue by far, gives Osborn a very strong boost in his "serious threat" level.
Now... on to the bad. Spoilers ahead.
Victoria Hand is exposed as a double agent (duh) who has been feeding info about the team to Osborn. To get her to admit it... Dr. Strange casts the "Death Illusion Spell" from the Shadow Book of the Vishanti on her, SIMULATING HER DEATH by means of Wolverine and Daredevil throwing her out a window. I repeat: SIMULATED DEATH. In other words: Dr. Strange just used CRUEL AND UNUSUAL torture in the same category with WATERBOARDING. This is such a strong betrayal of the superhero code that it just stops me cold. Sure, this is a big nasty situation where answers are needed now... but heroes can't do that. With civilians actively protesting the Avengers in this storyline... well, Dr. Strange gives them cause to do so, if they were to know. Maybe this is Bendis' intention, making us question if the Avengers are really so selfless and good and that it will come back to haunt Strange in the end of this story and he'll back out of the team or something due to a crisis of conscience... but I somehow doubt it.
Anyways, after that, Hand is revealed to actually be a TRIPLE agent, feeding the info to Osborn on Captain America's orders (again DUH)... but our heroes don't know if she's telling the truth so here IRON FIST steps up to the plate to do the intimidating; acting as if he's about to throw an Iron Fist punch to her head (this coming an issue after he PUNCHED OUT A THOR ROBOT); a blow that would easily kill a normal human. He of course pulls the punch short, but the fright is enough for both Daredevil and Wolverine to be able to get a read on her accelerated heart rate and know she's been telling the truth... but in a way, this is very nearly another simulated death for Victoria Hand, and Iron Fist is likewise tarnished.
It's possible that by the end of this storyline, our heroes will have to come to grips with what they did in this issue and we'll actually get some closure on it... but for now, this single issue goes to great lengths to tarnish the reputations of multiple beloved characters, and superheroes in general. Nice job.