Hi, to answer your question, no your broken isolation washer (if it was allowing the screw thread to touch the bracket) would kill the spark at the points and stop the engine firing on two cylinders..
Other possible reasons for excessive sparking might be - if your points are pitted, oxidised, have a high resistance across them, or if they have been cleaned maybe with emery cloth or some sort of abrasive paper, (which leaves tiny bits stuck in the points surface)
Is it only sparking bad on that set of points then?