Maybe Dick did throw his costume into the flames, but why in the world wouldn’t they show it. That would have been a powerful moment, and it certainly isn’t like this show is edited so tightly there was no room for it.
I can see what you are saying about the cycle of self-loathing. My problem with it is that it didn’t feel like Dick was taking steps to get out of that cycle. I realize in real life that people can spend their entire lives in destructive cycles, but it doesn’t make for exciting television. (Minor spoilers for Arrow) It reminds me of Captain Lance’s recurring relapse into alcoholism for the first five or so seasons of Arrow. Eventually, you are like, “Again!?!” It felt as if the story just continued the same beats over and over until this final episode where Dick suddenly gets over it. I didn’t see what growth he had made to earn the turning of a new page.
I don’t really see how Raven learned that Trigon has no real control or how she came to understand her powers or how Beast Boy had already faced his worse fears when others hadn’t. Maybe I’ve forgotten stuff or missed a bunch, but it feels like the story you describe is better than the one we actually received.
I’m hoping you are right about this season being a season of growth. It certainly looks like they are going for a tone shift from the trailers and the end of the first episode of season two.