Yes, the stockades are used to kill. Although it's more of an "execution" than a "burn at the stake" thing. The columns weren't on fire the area around them was lit up so they can see better.
As for Dusknoir, yes he is going to kill you because he was ordered to.
No the other stockades were-... Well maybe who's to say they wouldn't use other methods of execution? I'll go with yes and no because as stated before the area around the stockades was lit up so Sableye can see, but we only see the world from the player pov so you'll never really know if Dusknoir had other prisoners.