"That of God" and the Peace Testimony

I must confess that I often roll my eyes when I hear "there is that of God in every person" used as an explanation for the various testimonies. I have written before about how I think "that of God" is misused, turning it into an outward philosophical outlook instead of an inward transformation. It is interesting, however, that Joseph Hoag gave a defense of the Peace Testimony using essentially the idea of "that of God" in others:

I shall state, that myself and wife are true Christians, and our children are in the minority - and thou knowest it is natural for children to believe what their parents teach them - and therefore we are all true Christians as far as our several capacities enable us to be; and now the question lies here; which is most like the precepts and example of our King - the author of the Christian religion - to lay down our lives, and all go to heaven together; or kill that wicked Indian, and send him to hell; for he must be in as wicked a state as he can be, to kill a family that would not hurt him. General, it is a serious thing to send wicked folks to hell; they have no chance to come back and mend their ways; and thou dost not know, but that if that wicked Indian was spared he might feel remorse enough to make him repent, so as to find forgiveness, and go to heaven. I really believe, I should feel much better to see him come there than to send him to hell;

I find that this speaks powerfully to me, and has come to mind frequently, especially when related to death penalty issues. While it speaks of how we treat others, it still maintains the inward workings of "that of God", and also speaks of our own personal transformation, since he is basically saying "I have been transformed by Christ already, I would die before denying another person that opportunity."