At least to me, it seems of Sword & Sorcery and epic fantasy (good vs. evil) is less about morality, and more about focus. Sword & Sorcery is more focussed on individuals, and specifically individual will to power, whereas epic fantasy is about conflict larger than individuals.
To give a for instance, Both the Chronicles of the Black Company and the Song of Ice and Fire are epic fantasy rather than sword & sorcery, even though very few characters truly qualify as "good" in the way that Frodo and Gandalf do. Whereas Glen Cook's Garrett novels, and Patrick Rothfuss' Kvothe series are sword & sorcery, even though they involve characters that are basically good, decent people.
Yes, I agree - IME this external focus seems to be a major factor in an epic fantasy's suitability for long term group campaign play. With S&S it's fine for a solo game where the focus is solely on the one Nietzschean PC, but I think it makes long term group play difficult. The original Gygaxian paradigm with a variable player group, self-contained sessions, and some solo sessions, could handle it ok, each PC being the star of their own little show. But it doesn't seem to work well with the usual post-Gygaxian assumption of same-six-players-every-session.