I really started to dislike Kurt when he started stalking Finn, Finn called him a fag, and then everyone thought that Finn was the most horrible person ever. Just piss poor writing (even though they tried to fix it). Kurt has never really recovered from that as a character for me. Just too dramatic and "me me me me me."
OK, Kurt was attracted to Finn. Big deal. He pinned after him. How many characters have reacted poorly to someone they were attracted to during that first and 2nd season?
Finn wasn't put in a bad light in that first season episode. He was portrayed as a fairly average male. The fact that Burt thought he wouldn't have a reaction like that with Kurt is a different issue (as we typically see Finn on his best behavior with Burt after he got to know him a little better).
It showed Kurt how upset Finn was with his advances (though when this occurred were they still really happening), as I don't think Finn really made clear to Kurt how uncomfortable he made him feel.
And it also showed Finn a bit about how much words hurt.
And in the episode which character do we see try and change? It wasn't Kurt, it was Finn.
Again how does that paint Finn in a bad light?
As for Burt, frankly most parents aren't going to allow others to make hurt full comments to their children without some consequences.
I think the show that has such flawed characters to begin with has managed to tell a fairly balanced Kurt/Finn relationship. Both the good and the bad qualities of both.