I used to play a lot of Runequest.
There are bad-guys in Runequest like the trolls. The trolls are creatures of darkness, and will eat pretty much anything, and are often at odds with various human cultures, but they're not monolithic, they have internal disagreements, they can be enemies in general and friends in specific.
Broo are the rape monsters. They breed by raping anything that moves (literally, sheep, dogs, cows, horses, people...) and depositing a chest-burster which eventually eats its way out and quite often has some sort of disease or chaotic feature. They are enemies in general and specific. Player characters can kill them without moral qualm, it is never a bad thing to kill a broo (except possibly as a trigger for revenge attacks by others, but being chaotic they don't work together that well).
Trolls are interesting adversaries. Understandable (in an alien sort of way), with motivations of their own. They can be negotiated with and in certain situations can be allies or even friends (to some players. Player races are generally not monolithic either, and it was funny to find half the party prepared to work with trolls and the other half really not).
Broo are really boring. There is no opportunity for players to negotiate or ally with them, short of selling your soul to chaotic, evil and untrustworthy gods.
Applied to Elder scrolls, what this means is I agree with Ghost completely about how interesting a game will be where the major adversary is Molag Bal. In the Skyrim encounter I didn't really know who Molag Bal was the first time, and once I'd played through I avoided it from then on. Boring, tasteless, and not followed through properly. You get no downside to the deal you make with him. The mace isn't corrupting you (as far as I can tell). It's basically power with no drawbacks (other than being weak compared with other magic items).