This all bothers me a great deal cause its all about perception. Her family is very conservative so they probably think a lot more went on between my fiance and him.

Ehm, what? Who cares about perception? It's simply a letter.

My fiance is curious as to what the letter says, whereas, I just wanted to dispose of it without reading. I don't think anything good can come from it.

It's your fiancée's letter, not yours.

He's such a narcissistic douche, I doubt he thought about the perception it could have on her family. And also even though I believe my fiance, there had to be something more there for him to write a hand-written letter. Its just so personal. Part of me is also bothered that she even wants to read the letter from a curiosity standpoint.

Stop obsessing over this guy OP. He's in jail, writing letters is often the only thing they're actually allowed to do to communicate.

What you should do is head to couple's counseling. It seems like there's a lot of resentment around.... starting with your fiancée defending this guy up to her wanting to open the letter now.