The whole idea of good and evil is silly. You can't say a peasant is good or evil.
The idea of a Paladin being able to walk around constantly detecting evil, is also silly and game breaking. Treating this as described in the PHB is a total headache for a DM and a great way ruin a good game. Not allowing or modifying it gets can upset your players and create arguments at the table.
Evil, considered as a bad thing that must be expunged, and players that play to this create a problems.
I feel evil and detecting as such should be reserved for agents, not just worshippers, of evil gods. If a truly evil entity has invested some of it's power in you, that can be detected.