The hidden mist village has always suffered through numerous civil wars. The bloodline massacres were an attempt to "protect" the citizens of the water country from the violence that the hidden mist village brought to them. The job of the hidden village is to protect the village, not to bring bloodshed to it. Once the bloodline users were being hunted, there was not much the hidden mist village did to help them. The citizens started to eradicate all those who were branded with a bloodline trait and now, almost 200 years after the massacres started, the bloodlines users still find themselves as the number one priority.
As the leader of the hidden mist village, the mizukage's have chosen to use this situation to their advantage. By allying themselves with the citizens of the water country to protect them from the threat of rouge clans, the mist ninja have found funding to support their every need. When the first mizukage gained the trust of the citizens, he agreed to contain the bloodline users; but over time the users started to refuse the offers of the mizukage's.
The current mizukage lived up to the reputation of his previous kage's and has taken maters into his own hands. He has made all of the bloodline users swear allegiance to him and now make up his private army of ninja called bakkusu, those who've elected not to have been deemed traitors of the nation and sentenced with high treason.