Hmmm, well truthfully I've feared something like this was coming. Largely because of "Sith Mania" in the forums and such and the fact that they seemed to be setting out to make the bad guys much cooler than the good guys.
That said, the Sith are supposed to be bad because they turn sociopathic behavior into a philosophy. Oh surely, no bad guy wakes up in the morning deciding "gee, I want to be really, really evil" except maybe certain maniacs. A lot do however wake up in the morning totally concerned only with themselves.
The idea of the Sith is supposed to be one of almost complete self interest in promoting what you want such as power, prestige, wealth, love, etc... as the most important thing. It's perfectly okay to take what you want from those weaker than yourself. They remain organized by and large by the logic that they are stronger as a group and every individual benefits, however there is constant infighting, paranoia, and other issues within their ranks as everyone is basically involved only in so far as they gain from it as part of the collective. Apprentices and trainees being nessicary to perpetuate the philsophy, as well as to be weapons for their teachers, as well as of course a sign of power that someone can train an apprentice well and still be strong enough not to fall to them. I've read a bit on the subject.
What this turns into is empires of depravity where the strong (and those with the force are strongest) prey on the weak, nobody is safe, and the whims of the moment by the very powerful could lead to the horrible screaming death of entire planets and civilizations.
It's been discussed in books, and Keira touched on this a bit in Knights Of the Old Republic II (which was allegedly written in part by George Lucas). Really the only arguement someone can make for the Sith *NOT* being evil is some of George Lucas' bad writing when he decided that love was prohibited by the Jedi code (to give make the Amidala/Anakin thing inherantly illegal and justify some of what had to happen). Whether this is part of the way the Jedi code was taught at that time period, or inherant to the light side is unknown. Arguements have been made (some coming from Lucas) that they were supposed to have been wrong about that because it was Love for his son that also redeemed Darth Vader in the end. It could be said that both sides can probably be allowed to love in an absolute sense.
As far as the Jedi not getting involved in the Mandalorian Wars, well we do not have ALL of the backround on that occurance still. It can however be argued that any philsophy taken to it's extreme is incapable of doing anything. It's possible to become so good that any action of note is too ambigious to take, or so evil and self interested that one can't be roused from their own pursuits and interested in doing anything that isn't specifically for their own benefit.
When it comes to things like slavery and "genocide" neither is specifically wrong or evil despite what some people will say, though various factors can easily make them so. Look at it this way:
#1: Slavery: Let's say you fight a war, and wind up controlling land where a lot of people hate your guts. If you just let them go on with their lives, they are going to continue hating you and eventually make your life difficult and probably even engage in war with you again when they feel strong enough. Not to mention being able to make it nearly impossible for your to control that land. As the conquerer (motives go beyond this basic point) your basically faced with the reality that you can't make them all prisoners and hold them indefinatly. Putting all these people to the sword is also distasteful, and wrong. Slavery represents a middle ground allowing you to maintain control of large groups of people without killing them. Viewed in the long term if you dispese the people through a massive empire over a period of generations you can also probably adapt them out of the philsophy and turn them into "your" people so when their descendants are freed they become just like you.
Of course this *IS* a slippery slope, after all how do you guarantee when the people will be freed? Especially generations down the road. There are all kinds of things that can go wrong here.
Likewise when dealing with prisoners and such one issue we deal with today is forced labour. The basic idea that you can't FORCE prisoners to work, making them a total drain on society. It's a complicated issue that also involves things like contractors not wanting to see prison labour on roads and such anymore because if the state uses them there is no need to pay the contractors/unions, but morality and the idea that forcing prisoners to work is slavery is also an issue and why we don't do it more often. In general prisoners are required to make a tiny bit of money for their effort, and it's voluntary. Still as a modern counterpoint to the above "war logic" (generally talking about the Romans and such) it's a situation where you'll find a LOT of people who support the idea of forced prison labour.
#2: When it comes to Genocide, there are questions when you extend it to an idea or way of life as to whether it's wrong. When dealing with a culture that defines itself by wanting you (or anyone but them) dead, conquered, or absorbed as a defining trait, by what sane logic do you argue for preserving something like this? Going beyond humanity look also at some hypothetical alien species and such like races of alien killbots, or even the "Aliens" of movie fame. Why by any sane standards would you keep something like that around? "Oh sure, we can't destroy the genocidal machine race that wants to exterminate all organics because Genocide is wrong". I think the "Aliens" movies have done a good job of more or less explaining why killing them all permanantly would be a really good idea, and why anyone who thinks otherwise (and there is always someone in those movies who thinks otherwise...) is a complete moron (and usually an EVIL moron to boot).
To put things into perspective I get the impression that the "Republic" has always been intended to be sort of like Rome in it's logic. This applies to it's general practice of slavery, the bondage of sentinent machines (Droids), and of course it's war policies where it totally destroys, conquers, and/or absorbs what enemies it fights even when not bring run by evil imperialists. It also however can be argued that it does not go to war easily, and tends to see violence as a last recourse, as shown by the usage of Jedi as "Troubleshooters" and the lack of willingness to make a move on rebel factions like "The Trade Federation" until the last possible second despite all common sense. Even as they were basically conquering Naboo the Senate pretty much sat down twiddling it's thumbs and sent two Jedi as diplomats in a situation that was clearly well beyond a diplomatic resolution (ie they were stupid). By the time they acted it was "oh geez, these guys we should have seen coming for years and attacked have built up this massive army and now we can't solve the problem with what we had anymore.... bring on the clones!".
I think the planets like those run by the Hutts make a certain counterpoint in terms of slavery and servitude between "enlightened" slavery and "barbaric" slavery. The Huttese planets not being part of The Republic, which made currency an issue during the movies.
At any rate, these are my thoughts. I'd imagine The Republic has a lot of laws governing slaves and such, and while it does engagein Genocide it's a last resort. With the Sith genocide is pretty much whenever a group would be slightly inconveinent and of no direct use to them (not even bothering to look for other ways without benefit) and slavery being totally unregulated and up to the masters. For example in The Republic there are probably humane working guidelines, and slave owners can get nailed for breaking them. For the Sith raping slaves with razor blades, or using them for reactor shielding is probably just fine.
Such are my thoughts from what I've picked up here and there over the years. I don't expect everyone to agree with me.
The bottom line is that yeah, The Jedi and Republic are not "good guys" to the standards of modern ultra liberal democrats. No more than say the Ancient Romans would be (albiet they don't go that far). I think the Sith could be considered an evil group of sociopaths by anyone's standards.
If Bioware tries to make The Sith less than evil and sociopathic, I think that will be a mistake. Right now I think that is one of the few things holding back the game from becoming totally Sith oriented. If they turn the Sith into anti-heroes to boot that would make them even cooler and really... that's about the last thing this game needs. As it is I'm concerned the good guys are going to become another "Alliance" (WoW) or "Order" (WAR) as it is.
I still look back to the traailers they did with these awesome Sith jumping out and pwning everyone, with these generic looking Jedi (who lose). I think that says a lot about the game, and I think they need to reign it in a bit and focus on balance rather than seeing how awesome they can make the Sith.
I'll be surprised if anyone (never mind anyone who matters) actually read this.