Even in written form, as a concept, she's hot and a good character. I bet the author thought it would be a pity to keep her on the demon side. There had to be demons among humans there had to be demons who betray their own race, so it was a golden opportunity to make her a recurrent character. The way I see it, the best solution long-term is either to make her the demon lord or to exterminate other demons. Then either Lugh kills her as the last demon, she attacks him then dies as the demon lord, or she stays put in either form. Then we can focus on internal politics. The version where she stays alive is best as she can be used to control nobility and keep Epona safe, thus maintaining her mental stability.