Just post her letter on the internet in an anonymous fashion, but that clearly identify her for those who know her.

Ie on your blog or whatever post "I just got this letter from someone who hurt me a lot a few years ago [POST LETTER]. It's good that people can apologize like that, and I really feel like forgiving her".

This way:
1- you get back at her
2- you do it "more maturely" because you don't name her specifically so you get back at her twice
3- Fatality, you do forgive her and get out of here being "the good guy".

Might not work but probably will. Yes, I'm kind of a manipulative bitch.

And to answer the thread question: I believe that ethics and morality depends on common sense and are specific to a person, but should be questioned whenever possible from both ends of the scale, being as objective as possible. Then, draw your conclusions.