I don't know, I think there should be some black and white.  Not all the factions, but some.  The fight between good and evil is the basis of fantasy.  Those great Joseph Campbell archtypes of mythology and lore.  Also, there are nations in real life that have certainly fallen in the black, and some that have fallen into the white. You can always take a part of a society and claim because of that small part it's evil, or it's good.  And yes, most things are in shades of grey when you look at the whole. Or they are white with a few black spots.  But there have been plenty of nations that have worked for the betterment of their people and peace with their neighbors and others that have looked to conquer and destroy their neighbors while seeing their people as assets or liabilities.

I don't think it can be applied to nations. Only to some rulers of these nations. Great Britain for example, has been both, and most nations have. I don't think we can paint the whole nation black. I agree some nations should TEND to have "bad" rulers, others - "good", but not just "bad" nations. Even authoritarian nations (like Empires in elemental) are not always just plain bad. Ideally we should have different rulers (at least two per faction) with different alignments.

I guess when I think of using the term "nation" I am thinking more of the government/rule and their policy and actions.  And in history, you have to compare the actions fo the nation to its people and neighbors to others of the period.  Can't use presentist thinking.   

Also, I hate to go all Godwin, but Nazi Germany was pretty evil.  They were cartoon evil.  Their level of evil makes possible the use of over the top evil empires in fiction and fantasy seem plausible.  All the crazy shit that you see in movies they have Nazi doing, like looking for magic artifacts really happened.  They did terrible experiments.  I'm sure shit nations like them existed through out time.  Also, Ancient Greece was pretty good.  Sure, but today's standards, there were some things that we would define as wrong or evil they did, but by the standards of ancient times, they where pretty good.  

But it's also true that such things tend to wax and wane with time.