Yes. I would consider it a torture of sorts. I used to teach a primary( Sunday school) class that consisted of eight five to six year olds. I remember teaching a lesson about Satan's fall and hell and such. I still remember the fear in a boy's eyes as he asked me if he was going to hell for hitting his sister.
I look back and only feel disgust and loathing for what I did. Thank (insert here) that I was able to break free of religion and find my rational mind.
I agree that it is a form of psychological torture. The damnation-salvation factor traps a lot of otherwise rational people in religion. However, the legality of teaching about hell is a whole other debate because then we're getting into limiting people's expression of religion and freedom of speech.
As a side note, fear of hell was a major part of what kept me from planning and executing suicide as a catholic child. Then again, if I hadn't been a bisexual in the catholic church, I probably wouldn't have ever become suicidal in the first place.
I don't necessarily think that the teaching of hell should be illegal. I say that because if you teach children that throughout history hell was believed as true by many people then it isn't harmful. At the same time one should make it clear that there is no evidence for hell's existence nor is there any reason that the children should fear it. Once all the facts are presented on hell then the children can decide for themselves whether hell is real or not.
But religious organizations don't work that way. They never let people choose and decide for themselves.
They have a choice about the degree of their teachings though. My religious education was pretty mild. I was certainly taught about the concept of hell and that's fine. It's such a common idea and is part of many figures of speech. They'll be exposed to it one way or the other.
But my church also never made it a point to actively scare children into obedience under the threat of eternal damnation. Others certainly do. Either unwittingly because they take the whole thing too seriously or because the church is blatantly malevolent. In any case it can leave lasting psychological damage and is definitely a form of child abuse.