You make a fair point. The actions of the father in The Girl Without Hands certainly raise moral and ethical questions, making it an interesting story to ponder.
As for the origin of this fairy tale, it is believed to have originated in Germany, with variants also found in France and Scotland. Interestingly, it has some similarities with the ballet "Giselle," which also features a tragic love story involving supernatural intervention and transformative feminine power over the physical world.
In any case, I'm glad you liked hearing about this obscure fairy tale!