Could Shylock have been a hero in The Merchant Of Venice?

Shylock could have been a hero if he had been merciful towards Antonio and extended him the courtesy by not being insistent that the Christian should be punished for forfeiting on the bond.

In terms of their agreement , Shylock lent Bassanio three thousand ducats, whilst Antonio stood as his surety. In terms of the contract, the bond was to be paid within three months and if Antonio forfeited, Shylock could then demand a pound of his flesh. Antonio, a wealthy sea merchant, was confident that he would easily meet the terms of their arrangement and willingly signed the deed, against Bassanio's wishes.

At the end of the agreed term, Antonio suffered a few serious mishaps. None of his ships had arrived back safely and he was unsure of their fate. It was assumed that the ships had either been wrecked, looted by pirates or caught in some natural disaster at sea. Salarino divulged some of what he had heard to Salanio;

Why, yet it lives there uncheck'd that Antonio hath
a ship of rich lading wrecked on the narrow seas;
the Goodwins, I think they call the place; a very
dangerous flat and fatal, where the carcasses of many
a tall ship lie buried, as they say, if my gossip
Report be an honest woman of her word.

Tubal also reported the same to Shylock later. The moneylender was overjoyed on hearing of Antonio's misfortune. The end result was that Antonio could not settle his debt in time and was thus forfeit with regards to the bond and had to pay the penalty - one pound of his flesh, as had been agreed..

Shylock did not display his Christian debtor even an ounce of compassion or empathy. He took a very harsh approach and had Antonio jailed, pending a trial before the duke. He was merciless in his treatment of the unfortunate Antonio, to such an extent that he even scolded the jailer for allowing Antonio, what he believed, were unwarranted freedoms.

Gaoler, look to him: tell not me of mercy;
This is the fool that lent out money gratis:
Gaoler, look to him. 

When Antonio asked to speak to him, he refused to listen, insisting that he would have his bond. He relentlessly pursued this course even when the duke, Portia and others beseeched him to show mercy. He refused even an offer of twice the amount owed, when Gratiano offered it. It is clear that Shylock was driven by vengeance and malevolence, inspired by his deep hate for Antonio.

If Shylock were compassionate, he would have agreed to other terms when Antonio met his misfortune. He could have either extended the loan period or have told Antonio that he would accept settlement from whichever source it came. He would have been regarded as a true gentleman and would have gained the respect of all and sundry and more importantly, the gratitude and respect of Antonio, for not insisting on restitution. he would not have lost anything since Antonio later recovered his fortune.

However, he chose to self-destruct. So deep was his malice that he refused any compromise and, in the end, was severely punished for it.