There's a few things here I'm going to comment on.

Item 1 - Goods killing neutrals.

Personally, I don't see it as some huge horrible sin...as long as it's not a constant thing. It should also not be a thoughtless act IC. By this I mean, if I ever see a good whacking neutral mob after neutral mob just for...oh, I dunno, let's say copper...I'm going to intervene. Additionally, if I see a good who kills a ton of neutral mobs (or pc's) with no remorse at all...it's not a good thing. Steer this over to paladins and the edge becomes even more fine. A lot of people have commented on how horridly overpowered paladins are...welcome to the catch. Paladins are pretty highly scrutinized and pretty much every imm keeps an eye on them. Sure there have been some crappy ones here and there, but the ones who really stand out as powerful...well, they've earned the power. Not only is the code enforced, but we expect them to be pinacles of good...so there are some things that other goods can get away with that a paladin probably can't.

Item 2 - Gnomish serial killers.

There have been a good handful of neutrals who have found themselves suddenly evil through their actions. However, neutrals, by sheer definition of neutrality, have a far broader scope of things they can do within their rp than goods. (For those of you keeping score, neutral is exactly that...neutral. It's not someone who is both evil and good at times, nor is it someone who waffles back and forth...it's someone who is neither.) Additionally, Thera is not our reality, it's a hideously violent place. So anytime you start holding Theran neutrals to 'real world' morality...you've got a problem, since even the most noble of noble paladins would be locked away and given the lethal injection were they to exist in our world.

Item 3 - Hero range lately.

I can't quite express exactly how annoying it is to constantly have to hear people complain that the 'other side' is 'winning' because hero range is swamped with (good/evil/neutral/ragers/mages/imperials/maran/rabid man-apes with pink tutus) whatever the opposition tends to be. The balance is in constant flux, it always will be. I'm not so much pointing at you here, but anyone who feels the need to post that as an arguement, before you post...check histories and archives, see how many times people have complained about your side being in power. I assure you, the side that is up has been down, and the side that is down has been up. So spaketh the Floofi.