That's more or less it. Babs isn't really the most ideal example, unfortunately. (I wish I could think of a better one, but I've left these replies more than two weeks as-is.) The reasons behind the initial storyline with her being shot were all really appalling. Her reinvention as Oracle is one of the best examples out there of a good writer coming along and making triumph out of what by all rights ought to be tragedy.
Also, it's not just a case of "the disability is used to create tension and then removed whenever the device is no longer needed"--it's more about relevance and consequences. A character can remain disabled, and remain alive, but still have either the consequences or even the visibility of their disability swept casually under the rug ("she uses a prosthetic now, limps a little, whatever it's cool, back to more important things") because the author has gotten the use they wanted out of it (the character has made their difficult choice, the audience has cried, whatever). Lots of people think this is something to be lauded for, because hey, they've got a disabled character, they're not dead or magically fixed, what do you want?
And to take that even further down the line, it's still not acceptable if that "swept under the rug" disability only comes up again when you need more dramatic tension. ("They're running from the bad guys and her prosthetic broke, oh no!")
Now, that relevance does not have to be a physical or a hugely obvious thing. I was extremely impressed by the Avatar: the Last Airbender episode The Northern Air Temple, because when I first realized the kid we'd seen gliding around so easily in the air couldn't actually walk, I was afraid we'd be getting a "disabled people are just as good as regular people!"-style moral of the week, delivered as anviliciously as impossible. What we got instead was the wonderfully restrained backstory that his father had been inspired to make the gliders and to stay at the air temple by the realization that in the air, "everyone would be equal"--and of course you realize instantly the one he's most concerned about being equal is his son, but you aren't bludgeoned with it.
That case is a little special in a couple ways, though, because I honestly wouldn't have cared much if there had been a lot of story relevance to Teo: it's starting with a character who is disabled in the first place, and it's a lovely bit of writing not to have their disability made into a big deal, to just show them going on with their lives*, precisely because that depiction is so incredibly rare. I can count the cases of it I can think of on one hand, and while there's a certain degree to which I can be sympathetic to a writer's desire to make use of the handy potential for drama a character with a disability makes, that sympathy got used up a while ago.
Then again, I suppose it still does apply: if the story you're wanting to tell is one where someone has a disability but is just depicted going on with their lives and not having it be plot-shakingly important, then you have to have a disabled character, so it gets through the questioning process just fine.
It's really not a quick, easy thing to define, but then it really shouldn't be. If you've gone and made a quick easy decision to make a character disabled, that probably should be your very first clue that you've done it wrong.
* Which isn't to say 'going on with their lives without caring that they're disabled', because they do and should and would, but you can be bitter as hell about not walking or being able to see or frustrated at times, and not have the story harp on it. Like Toph, for example; A:tLA was all around frankly pretty remarkable for this sort of thing, and I hope to shake the hands of everyone involved some day.