First, conventional use of the term hell/damnation and the associated smoke/fire as being bad would imply it is a place of suffering.
This isn't even an argument. You can call anything anything. The Fanim claim the 'Heavens' of the Hundred are really Hells.
Second being essentially all dogma of the Three-Seas validate this view that people are tortured there. Literal prophets of the Gods preach them as unpleasant places for those who go there.
Various prophets and religions in Earwa claim all kinds of things. At least some of them are very wrong. All we actually
know on this particular point is what we've been directly shown by PoV characters (which is almost nothing) and what Bakker has said extra-textually, which is basically that Ajencis and Memgowa are somewhat close to being right and that Fane was mostly wrong. The Scylvendi don't believe they get an afterlife at all (and are implied to be dead wrong about this). The Nonmen told the High Norsirai they could find Oblivion merely by "hiding their Voices" (and it is implied that it's actually much harder, or maybe just more random than that). The Tusk claims whores are damned, but Esme and Mimara seem to prove that isn't automatically true. Proyas' father (and the Mutilated) claim that being a ruler inevitably leads to Damnation, but again Esme seems to disprove that.
Kellhus says it is a bad place (I can't find the scene where I think he is actually there, so one might quibble as to his experience, but it does point in agreement, especially for someone who has made a deal with the gods).
Because Kellhus always tells the absolute unvarnished truth, right?

Actually, Kellhus' visit to the Outside is probably the best evidence we have that you're right. But he still only sees what the Gods/Ciphrang appear to be doing to the souls of the dead from his own PoV. There's no evidence in those scenes that the souls are conscious.
The Progenitors thought it was bad (supposedly), it seems like they would be very capable in verifying such a view and would do their best to (given the extremes they've gone to now avoid it).
We're back to "these guys believed X, therefore X is objectively true". For all we know, the Progenitors might have been really prone to jumping to conclusions based on little actual evidence.
We have the dying moments of Saubon that seem pretty grim.
Could easily be his last impression of dying in a nuclear fireball. Or maybe souls retain consciousness for a few instants after death before being consumed. Still doesn't prove the suffering is eternal.
The language Cnaur/Ajokli and Kellhus/Ajokli use. But most telling, the PoV chapters from Kakaliol's view made it seem like it was aware enough as to what inflicting torture was.
All these characters had a vested interest in being scary. Of course they're going to promise eternal punishment.
As far as arbitrary not being the same as random/meaningless, it kind of does, not to get into semantics.
Nope. Especially not in the way Bakker seems to use it in this context. He says it depends on whether the God likes you and that he (Bakker) doesn't know what the rules are that determine whether the God likes you. He never claimed it was random. Just that even he doesn't know all the rules (because he wants it to seem unfair and arbitrary to the readers). Bakker does hint at some rules that seem to apply, though. Premeditation, for example.
Damnation also cannot be
meaningless, because the whole point of the series is that Damnation is a result of things having meaning, and that stripping the World of meaning (via the No-God) makes Damnation go away.
For the record, I actually agree that Damnation is probably exactly what it looks like, and that the Consult are probably at least mostly right. My objection is to people claiming that the Consult are objectively the good-guys. You're making assumptions based on limited information and then using those assumptions to justify genocide.I think you're point is since we don't really "know" what damnation will be like ( and in kind, neither The Consult/Mutilated ), then their approach HAS to be evil since their design is based on an assumption. Sounds like the logic of the "sane" to me 
No, I'm saying we the readers don't know enough yet to say whether the Consult are the good-guys or the bad-guys. I'm entirely open to the possibility that the Consult actually know more than we do.
I do find it slightly disturbing just how quick and eager people are to construct an interpretation that justifies genocide, though.