I always imagined the Cycle of Desolations as (at least partially) a positive force, as it gave all of humanity a common enemy to fight against, binding them closer to one another, and giving people a force to shape them into honourable fighters, as any group made up of traitors and cowards would fall to the forces of the Desolation. This is basically an argument for Social Darwinism, and would lead to a society that is tightly bound together by both a long tradition and necessity. This is supported by the back of the book, ("...Did our enemies realize that the harder they fought, the stronger we resisted? Perhaps they saw that the heat and the hammer only make for a better grade of sword. But ignore the steel long enough, and it will eventually rust away.") as well as the fact that the Desolations stopped with the breaking of the Oathpact. If Odium had wanted to, he (it?) could have instead unleashed his power and brought a final battle to destroy mankind, as Honor no longer had champions in the Heralds.
I can't see the Heralds gaining their powers from a deal with Odium, because then they would be fundamentally different from surgebinding (which they might be). I still think that it was a deal between Honor and Odium, granting the Heralds the powers of Honor, in exchange for the tortures of Odium.