On the first round through this, I didn't like this episode much, but it's better to me in context. I definitely agree with the "these people are too stupid to live" sentiment, but I can see the background for it.
I can definitely see how Ianto would not be able to see that Lisa was gone, that the Cyberwoman posed an irredeemable threat. Knowing what we did from the past, the sight of her and the rig was horrifying. But to Ianto, no matter what else happened, he just saw Lisa. He had drug himself through horrors to get her out of there in the first place; he was the reason she was not completely upgraded. So for him, there was no way to know how far gone she was until, unfortunately, she was free and killing people. And then there was plenty of time for denial.
His grief was so palpable. Of course, narratively I wish he'd been able to kill her. But I think it's telling for his character, his relationship with the team, his process, that in the end he was unable to. He would risk the whole universe, over and over again, for her, no matter how small the hope was. And he knew, at the end. He knew, but he just couldn't make himself do it. I think an American show might have had him shoot.
Now, about the sexualization of Lisa. Oddly, it didn't ping me as badly as some other depictions do. I think it was because her sexualization was a plot point. It figured into the way the characters interacted with her, into their expectations. I cringed when the scientist groped her, too, but I think I was intended to cringe. Her sexualization wasn't just blatant for viewer titillation, I thought, although probably that was there too. It was intended to have consequences, to be discussed, to be dealt with.
It was acknowledged, you know? Like, okay, we fear and hate the Cybermen, who are faceless automatons and killers. But what if it were flesh and blood and mechanical and impersonal, all at once? Do we hate the Cybermen because they are a threat to us, or do we hate them because we cannot touch their flesh, feel the beat of their heart, experience them as entities, sexual and otherwise?
To me, that's an important question that needed to be dealt with. Could we have done it without the completely OTT costume? Probably. And could we have an interesting conversation on why it had to be a woman to be a humanizing element for the Cybermen, and the state of gender and human identity? Probably. But I feel like it was part of a conversation, not just an abusive oversight, as I often feel about women's portrayals in media.