Are the evil afterlives actually punishments?

[Rater202]

To want to exist forever at the cost of everything else? Yes, yes it is. Also, you are calling Thor morally bankrupt for continuing to exist, too.

No, I'm calling the Gods in general morally bankrupt for prolonging their own existence at the expense of countless mortal beings who are being misled about what the afterlife entails.

As for what he should do? He can start by not leaving out the "eventually, you lose all sense of self and get consumed by either me or the plane itself" part out of his lecture on how godly sustenance works.

If the gods want the moral high ground, mortals need to know that they're basically cattle for the Planes and Gods while they're still alive. Reasonable access to means of extending their life indefinitely should be widely available, for mortals who want to opt-out of eventually being god food.

Alternatively, at the beginging of a given act of creation the Gods could have made all races immortal and subsisted entirely on worship.