It's not one or the other. LN gives me a large stepping off point for filling in those other details. As a DM, if I see that Agarys Baltabay is LN, the I can use that as a large foundation for the few details that will create the code and such. I have to do very little work to get the same character you get designing the character from scratch. Without that LN, not only do I have to do much more work to get to the same spot, but I have to figure out if I want him to have a code and such that would be LN in D&D, or whether I want to develop a more LG personality or CN or, or, or.
Then I have to do that dozens more times for all the various monsters and NPCs. Having a base alignment for me to build off of is a huge time saver, and if I really don't want this particular gnoll to be CE, I can ditch it and develop a LN personality and quirks.
Well, imagine, you're sipping beer, reading an adventure module and prepping notes. There, this guy is mentioned in passing, like "Inside a tavern is only one person, Aqarys Baltabay, (LN human)". Cool, now you need to stop for a moment and think "who the hell is this guy?". You continue to read: "Few moments after the PCs buy their drinks, a group of bandits from the Fiends gang barges in, being rude and naughty word".
"Ok, now how that Aqarys guy is gonna react", -- you think. The answer is, I don't have a clue, figure it out. Put work into it.
Now, imagine the same guy being introduced as
Aqarys Batlabay (human, law-abiding,
"please, leave me alone"). Or
Aqarys Baltabay (human, good cop, no-nonsense attitude). Now you don't have to put any work, you pretty much have all the answers.
Now let's flip a couple of pages back and talk about scale broader than one guy.
"There is a bitter rivalry between the Southern Circle gang (mostly humans, CE) and the Red Tigers gang (mostly humans, CE)". The only possible reaction is "WTF, it should be explained later". And then it isn't. "What a moron wrote this", -- you'd think and I'd agree.
Now, in alternate reality version of this adventure it instead starts as "There is a bitter rivalry between the
Fiends gang (mostly humans, drug-crazed, violent, numerous) and the
Red Tigers gang (mostly humans, disowned war criminals, sadists, close-knit)". Even if the moron who wrote it never elaborates further, it's still something substantial to work with.
Like, yeah, alignments are shorthand, but they are very, hm, lossy shorthand -- one that blurs too much details, and, more importantly -- fail to highlight what's important and what's not. The fact that gnolls live in close-knit packs and value their bloodkin is at least as important as the fact that they kill and enslave people with zero remorse. And then there are different shades of evil and different shades of chaos....