Dany basically told Tyrion what she was going to do. She said she'd be merciful - but for future generations.
And she told Jon how she'd rule. If she couldn't rule w/ love, then she'd rule w/ fear.
Dany came to the North w/ Jorah, Missandei, & Grey Worm, 2 dragons, & armies, & she came from lands where people loved her, where she was Queen of Hearts, she was Khaleesi.
Jorah & Missandei are gone. She has 1 dragon left. She lost much of her armies. And she realized that people in the North don't love her like they love & celebrate Jon Snow. Plus, she really did love Jon Snow, &, when she tried to kiss him, he pulled back - and that's when she told him, "Okay, then, it'll be fear."
I was rewatching the episode last night w/ our 2 older kids, &, in the "in last week's episode" synopsis before the actual episode started, as Dany is standing in front of the wall watching Missandei being killed, there were voices being played over the scene - just different little snippets of different characters over the seasons saying things to Dany or being said about the Targaryens, like the oft-said, "Every time a Targaryen is born, the gods flip a coin..." line. However, one line in particular stood out at me which goes all the way back to Maester Aemon from the Night's Watch who said something like, "A Targaryen alone in the world is a terrible thing."
Earlier in this thread, I mentioned the "flip" that I saw in Dany's face while she's crying after the bells rang. Last night, after the episode, I watched the "Behind the Scenes" segment, & the writers talked about the moment. Dany is sitting on her dragon staring across King's Landing, & the bells are ringing. She sees the Red Keep which HER ancestors built so long ago & thinks about all that was lost to her & all that's been kept from her. And she snapped.
And, there have been times when Dany has been indiscriminate in her revenge. When she crucified all the slave masters is one example - some of those men were not cruel. I think she even later had one of the sons tell her that his father had been a good man.
Dany was always going to be the Mad Dragon Queen. I just wish her story had had a little more time to build.