Having caught up to where the show was when you posted this:
While looking over summaries of the books and stuff, is it a mistake to believe that the Theon Greyjoy plotline will continue like it currently is for the next... 2-3 seasons?
So far it's been paced roughly the same as in the books. The difference is that the books bench Theon for awhile and when we see him again he's missing most of his teeth and fingers and we find out what happened in flashbacks.
It serves a few narrative purposes.
First, in A Clash of Kings you're led to believe that Theon dies when Winterfell burns. It's late in one of the next couple of books when there's finally word that he's a prisoner. In the books that makes it a dramatic surprise. (Or not a surprise. I subscribe firmly to the rule that if there's no body then he's not dead. But nonetheless dramatic.)
Second, it gives us some space from Theon for awhile.
Third, it allows him to hit rock bottom.
Thematically, it's one of Martin's favorite devices: making a character utterly odious and seemingly irredeemable, making you want terrible things to happen to them, and then making them suffer so much that you feel terrible for originally wanting it to happen.
Another of his favorite themes is that it's under greatest tragedy and duress that people show their true mettle, and the ones who seemed irredeemable may be imminently redeemable after all. We're seeing that story play out with the guy who shoved a little boy out a window in the first episode, of course.
And additionally, it establishes Ramsay as the most legitimately twisted character in the series, and indulges in the most unflinching portrayal of brutality and sadism in a series that's rife with brutality and sadism. Seriously, between Ramsay, Joffrey, and the White Walkers, Ramsay would be my last pick of people I'd like to meet. (True story: my reaction to seeing [spoiler]Ros full of bolts[/spoiler] at the end of the previous episode was relief. I was worried she was going to wind up married to Ramsay.)
The show, on top of that, has to use this sequence to introduce us to Ramsay in the first place. You meet him earlier (and under much more dramatically satisfying circumstances) in the books.
All that said, as horrifying as things have been up to this point, they've still been toned down. Even the [spoiler]castration and hunting humans for sport[/spoiler] are diluted -- though the book is much more coy about the former and lets it act as a slow burn where it's never said in so many words and it's left to dawn on you slowly.
But unlike the book, at least so far nobody's been [spoiler]raped by dogs[/spoiler]. Guess there's still time for that, but as I've said before, I don't think the show will go that far.
I guess I don't really know the answer to your question -- I don't know how long the torture subplot will keep up or if the show will bench Theon for awhile now that Ramsay's been established and the highlights have been depicted in real-time instead of as flashbacks. Likelier, I think, is that next season we'll start seeing [spoiler]Theon as Ramsay's pet[/spoiler] and less of the torture.
As far as it being tough to take: yeah. It is. It's fucking awful. That's kind of the point.
As for how I feel about it, well, after "horrified and squeamish" it gets harder to quantify. Is it necessary? I don't know. Is it effective and affecting? Yeah, it's certainly that.
It certainly feels different than when, say, Tarantino does it. I don't get the impression that Martin enjoys writing it at all -- I suspect when he said Dance was "two bitches and a bastard" to write, he wasn't just talking about the difficulty of juggling a dozen different major plots running at wildly different paces.
