Wood himself more or less acknowledges this when he says to Spike:
Surely he has to know that Spike with a soul != William the Bloody
Yet, he rationalizes it, and is content with getting a face morph out of Spike. That's enough for him. I can understand this position, because while Wood (or any person in that situation) would be able to intellectualize it, this idea that "this is no longer really the person/thing that killed my mother because it has a soul", we're dealing with feelings as opposed to thought. He motives here are clearly governed by the lower brain, the part that controls automatic function and emotion. We all have this and it is often at odds with logic and reason.
Also, I think that Giles' disdain for Spike hearkens back to S4, ever since he attempted to express a genuine debt of gratitude to Spike, in addition to making good on his promise to pay him in exchange for helping him earlier in the ep. Spike responds by telling Giles to "piss off" and is a huge dick toward him before kicking him out of his crypt. Back when I first saw the episode, I was pissed for Giles myself, and I'm pretty sure Spike never truly could have redeemed himself for that and for generally being a vicious vamp most of his life. Not in Giles' eyes. Its a little bit different than the grudge he held toward Angel (see: Angelus/Angel) for a while, and while Spike never tortured Giles the way Angelus did, I think its interesting to note that Giles seems to be more willing to understand about Angel and put his personal feelings aside eventually. Didn't he? I'm pretty sure he did; can't point to a specific instance as I haven't watched BTVS in some time and it was probably more like a grudging acceptance but still more than he'd ever give Spike.
The thing with vampires having souls is that they still are, for all intents and purposes, the same being. Though that's not technically correct. I mean, how easy would it be for you to forgive a person who murdered one of your loved ones, even when you knew they were genuinely remorseful for it years after the fact? They actually cried about it and lost sleep over it and wished they could take it back with all their might. They had nightmares over it and if given the chance would sincerely apologize (profusely) to you? I suppose this would be the closest thing to somebody suddenly getting a "soul" in real life. I can't imagine that too many people would care that the person who did something nasty to them or theirs was a changed person for the better later on in life. They'd never kill like that again, and their death would not reverse their past actions, but most people would still want revenge. The thing about it is that this probably never makes anything better anyway. All that said, I'm glad Wood was unsuccessful. 😛
As an aside - I don't know why exactly, but "Lies" was very cathartic for me.
---------- Post added at 06:04 PM ---------- Previous post was at 05:27 PM ----------
Add:
but of course he takes the money