Turning him would be stupid. If ever there was a guy custom tailored to be a babyface wrestler, it's Jeff. Be smart and keep him that way.
I agree with this quoted portion of your comment.
I don't know what it is about Jeff Hardy, but people
LOVE him. Something about Jeff Hardy speaks to people. I can't remember another guy ever in the business(who was from and wrestling in the U.S.) that was so limited on the mic, yet able to garner such a truly over babyface reaction. Jeff Hardy gets a better reaction than even Sting or AJ and I never thought I'd see another wrestler that one could say that about in the Impact Zone.
This isn't about if Jeff can or can't play an effective heel. He has a darkside and a mystery factor that lend themself just enough to allow him to be a quality heel if situations were to dictate it, but frankly, they don't. TNA doesn't need a new top heel- for right now Ray and Roode are amazing at what they do.
The fact is that people want to feel it's okay to applaud Jeff Hardy, they want to support him. There is no reason to turn a guy that the vast majority of your fanbase so badly wants to be able to stand behind. This isn't like the Cena/WWE situaution, which is a highly debatable one, because Cena's reaction's are atleast mixed to some degree; a vocal portion of their "universe"
wants to boo him. We never really experience that with Jeff.
Even while in the WWE, logic would dictate that if an orginization aimed almost solely at children and tweens was running a storyline pitting an anti-drug using, non-smoker, non-drinker, who is well spoken facing off against an enigmatic, introverted, troubled, mysterious, drug-addled oponent that the latter would be the heel. But that is not how things were worked, and Jeff, Punk, and the storyline were better for it.
No matter how he's packaged something about Hardy causes people to want to flock to his support. They want to cheer him. They want to see him win. He is the most over guy on the roster and the most mainstream known and recognizable babyface that the company posesses(south of 50 years old).
In short, I believe another Hardy heel turn is bad business.