He was a carpenter wasnt he? Any way he was trying to live a normal life before joining the Avengers just trying to make sure his son had a normal life. So I would say he had turned it around. He was an interesting Avenger so i think many fans would have him back. As for Steve letting him back I think he knows what an asset Ares is and would rather not disrespect the God of war by turning him away and give him at least a second chance.
So? Once he joined the team he came across to me more as a liability than an asset. He hardly ever stops to think about his actions and the few times he used his "war god brain" it was for direct attacks anyone could have thought of. He sided with Osborn and still had great difficulty controlling his bloodlust. I think he only joined because he loves to fight and as he once said being a warrior lets him indulge his bloodlust for a sometimes worthy cause. He is hardly an asset when the likes of Hulk, Hyperion, Thor, Hercules, Wonder Man, or several others available. Frankly, given his past, unrepentant nature, and general actions on the team I cannot imagine Steve in his right mind letting him on the team. Iron Man only let him on by whitewashing his past and it did not make sense to a lot of fans. I also have not heard of Ares having that many fans so I don't think many would be eager to have him back.
I think he meant Scarlet Witch committed genocide and is referencing House of M.
How was that genocide? She depowered mutants, but did not kill them unless you want to say the act of depowering is genocide which I suppose is possible. But iirc she was mentally disturbed at the time which the same cannot be said for Ares.
You have to understand the time period in which Ares was recruited as an Avenger. The Avengers were a mess at that point. Cap & Iron Man were warring against each other, I think Iron Man was just trying to put together the most powerful team that he could, he didn't really consider backgrounds. I think he did some shady deals with villains and he helped create an android Thor clone with Skrull Hank & Reed Richards that ended up malfunctioning and causing the Avengers some real problems. If anything it would seem that Steve should have less trouble trusting Iron Man than Ares. Iron Man was is responsible for alot of really bad occurrences in the last 5-7 years.
I remember reading the Mighty Avengers story arc where Tony put together that team. I recall a funny moment in Carol states that the enemies they fight are not scared of power and Tony agrees and says with all the heroes they can choose from he wants a team with diverse talents. But in the end he formed a team composed of mainly heavy-hitters. Thor was still dead and he had alienated Hercules and some of the other heroes commonly called upon to form the avengers. They put the highly mentally unstable Sentry on the team. Ares' own past was whitewashed as the "guy who fought Hercules a few times." You are right in nearly every decision Iron Man made during that era was highly questionable.