It does cut both ways.
I've seen many youngsters use bloodlust as a way to continually cause trouble, not specifically aimed at me but at my city - getting involved in warfare, killing enlistable men, knowing that I will try to avoid killing them, or that I will only be able to kill them a couple of times because of bloodlust.
There are certain people like this who often have far more experience and confidence about themselves than one would think their small size would warrant (*ahem*).
Bloodlust is their great ally, and also causes me annoyance because it means I lose more when I die, just for preventing attacks on my city.
When used as a tactic like this, it clearly goes beyond the scope of how bloodlust was intended.
Perhaps the solution is to have some mechanism for certain younger players to give less bloodlust despite their size - either as a result of godly intervention, or senior players, or some running count of competence in battle, rather than just skills.
Written by my hand on the 21st of Agamnion, in the year 1144.