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So if I understand correctly, the prisonner you sell to NW go directly to their army / garnisons ? Even the one sold to the wandering crows ?

Executing a lord result in a reputation malus with every lords and factions (Essosi too I think) and yeah, Joffrey is still considered a human being despite all the scientifics reports.
In war time it's still allright as you can easily regain the lost relation with the honorable dude but in peace time it's not the best idea. Or not if you want a refreshing way to start a war !

Note that sending to the Wall is always a better option.