1. The Director's Cut fleshes out Bloom's character and background much more significantly, we learn he is a veteran of several wars and is well-versed in fighting, but on horse and on foot. So this reason I am going to disagree with.
2. Yeah I agree. Syntinen (RIP) had some great posts about this before, but it didn't feel earned enough for me. Yes, Norton's speech about always being just and standing before god came back into play here, and that's why Balian spared him...but come on. Because of that decision thousands and thousands more will die too, people in many cases far more innocent than Guy.
What they should have done was make Guy more like he was in real life. A well-intentioned, but largely spineless leader who was too easily manipulated by the forces around him (particularly Reynald of Chatillon and Gerard de Ridefort). As an innocent and slighly helpless guy, having him MURDERED would weigh on Balian's conscience for sure. It would make the decision far more intriguing.
3. Agreed. Some real philosophical anachronisms going on with that speech. Although I do ****love**** the 'who do you think you are? Will you alter the world? Does making a man a knight make him a better fighter?!" And the looks on everyone's face answers his question.
I still hold out on point 1, even another great Templar/Hospitaller would have struggled against three other elite warriors such as these, fully armed- let alone with rocks?