I figure good deities want you to choose to be good, so you aren't hardwired.
That's sort of weird logic. Obviously if you wanted them to do just what you said you'd manipulate them. Its if you didn't care that you would let them do whatever. Several factions have hardwired creatures though, namely outsiders and constructs, some of which are made by the deities themselves for a particular purpose if I remember correctly.
See the light logic is sort of awkward... and subjective. Saranrae's church also cast Geas to ensure people are god citizens if I remember right. Not sure its she's totally for free will either.
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Used as justification for genocide or child-killing I've got no use for it. It's generally the GM's job to not throw that kind of nonsense at the PCs.
This x1000. Unless the players are really determined to play awful people, you go out of your way not to force them into situations where they have to choose between being a**-hats and making stupid decisions.
Intractable moral quandaries are okay when it's important to the story or you want to feature it as a discrete challenge. However, making every combat encounter a morality trap has the potential to severely bog down the game.
There are fantasy novels with shades of grey, too. They may not be as old as mythology, but they've been around quite a while. Many of them approach grey from the dark side, where everyone has a price, and outer holiness hides inner corruption. There's also a history, though, of ne'er-do-well characters with unexpected hearts of gold.
Come to think of it, many mythologies feature gods and powerful mortals who aren't paragons of virtue or unmitigated villains. (The Greeks come immediately to mind.)
Tolkien may represent one side of the source material of D&D, but it's not the only side.
Ovid's Metamorphoses loved using the archetypal Good Guys as the jerks. The portrayal of Athena in particular is really condemning (he could get away with it because he was Roman, not Athenian).
I personally get very... uneasy with black and white morality, partially because I'm a fairly popular target for it, at least here in the US. I don't think escapism is a good reason, and is actually rather dangerous; there are too many people in this world who don't understand that reality isn't so simple as Us vs. Them, and playing Cowboys and Indians only further implants that philosophy in the public mindset.
So, how do you justify a race being completely and utterly evil all the time everywhere it goes regardless of anything else? If you don't how do you handle the diversity?
When I want such a race, the explanation is simple: they're all natural-born psychopaths, and they have no Code of Harry to make them morally ambiguous!