No they were not the bad guys. Please refrain from Obama-esque revisionism; I heard enough of that while in school in Ireland, to boot, from Obama’s ideological forebears/brethren.
Leaving the blood of Americans unavenged advertised US weakness; it was not the British who sank the ship, and that is the bottom line.
It isn’t Obama revision. So is your argument that the Germans had no right to sink a war munitions ship? They were even civilized enough to warn everyone in advance with a full page NYT ad.
It was Brit propaganda.