Yeah being backed into a corner of the world with all "good" races on the brink of extinction made for a great goodly campaign. I understand your point and we had similar "issues" that made things interesting and party dynamics were often the most important to the fun. We had brawls/duels to settle arguments. The rough "borderline good" Ranger not letting the Paladins know he had taken a prisoner while he scared the info out of him behind the farm house. The Ranger and Rogue going "to cover the back entrance" and then not telling the party how they got their success. Drow PC's that were relatively good by Drow standards but not quite on the up-and-up to those on the surface. Paladins player characters who became Anti-Paladins then favorite NPCs whom the party couldn't quite kill. Characters getting turned into vampires then turning on the party. Rogues stealing from the party. Druids turning on us and getting the elves to leave the union... Druid Thief conveniently failing to mention to the party that she was also a thief (we thought she was only a druid). A Paladin getting mind-controlled and still being played by the character (with the DM privately advising him) then turning on the party. I think one of my favorites was when we had a Barbarian who didn't allow magic in the party so everyone wanted the Frostbrand blade that didn't glow (until it dropped below freezing and all hell broke loose when he turned on the wielder). It was pretty funny when the barbarian finally figured out that the Bard's songs were actually wielding magic (he had a low int score) and after warning him the barbarian knocked the bard unconscious in the middle of the fight while yelling "no evil bard songs!".
I did get dared to play evil in a party of all evil or chaotic neutral characters. They kept bugging me about it so I finally gave in. In the end I schemed with a buddy to kill the rest of the party and in the final fight after the enemy dropped and everyone was mostly dead (we held back some) we then killed everyone and then I killed him. After that no one asked me to play evil again.
A LE Drow campaign would be interesting to see unfold. We never tried that and didn't have evil folk who had to be lawful and relatively keep their word.