Hydaelyn is supposed to be the physical form of source of Aether, and therefore lifeforce, for the world. That's why as she gets weaker Aetheric levels start to drop one would assume.

I think the thing here is this isn't about Hydaelyn doing an evil by possessing Minfilia. If Hydaelyn is our king piece in the war between the Ascians and us (and this is very much a war), then what we could be seeing here is Minfilia sacrificing herself at least in a way. What exactly is Hydaelyn's options here? If this is necessary and she doesn't then falls then what? We lose? That's not a noble or kind thing to do. That's sacrificing everyone and throwing away everyone else's sacrifices for the sake of pride and idealism.

We have twice in HW been saved by the sacrifices of others. They lost their lives to save ours. Are we bad people because of that?

Now this is all speculation so the above scenario could be completely wrong. If find it a stretch from how the narrative has been presented to us so far for them to so suddenly make Hydaelyn appear a villain, particularly because under every stretch of the imagination it is still going to be hard to sell the Ascians as 'good guys' considering the carnage and death they have caused and continue to cause. If Hydaelyn go bad, does that mean we turn on her? Does that mean we will suddenly have Midgarsormr turn on us since he is her ally. Will we lose the Blessing of Light? Exactly what will we do then? That narratively at this stage of the story sounds like it would be utter chaos. That's why Im not expecting it.

The other thing we should consider is Minfilia's current situation might not be permanent. This might be a stop gap measure. We just have far too little info to go on at the moment. I wouldn't leap to the conclusion that this is evidence of Hydaelyn going bad.