Maybe the Norse alfar are good, in the sense of bringing good fortune to human individuals and families, and sometimes being guardians. But they can be disturbingly vicious when lashing out against enemies.
The Scottish sith seem ethically ambiguous, and in any case dangerous, albeit they teach humans how to heal and do magic.
The French fay (faie) are inscrutable, causing both magnificent and devastating fates, without obvious reasons.
Mythological accuracy helps me enjoy the game more, and beauty is central for these kinds of elves. And Greek nymphs too.
That said.
I strongly agree with the WotC decision to remove alignment from every D&D player race.
Every character of any race, requires the player to decide what alignment their character is. That includes any elf, including any drow, and any orc.
For D&D, I want to see male nymphs (of any kind of nymph) and valkyries, and so on. (While the valkyrie can be various races, I agree with the scholars who suggest they were mostly female alfar, the dis, who choose the fate of an honorable valorous death.)
Unearthly beauty is certainly one of the defining traits of many a mythological creature, including nymphs and elves. Just as ugliness defines other creatures. As does gender sometimes, as nymphs and valkyries usually being portrayed as female. Beauty is almost always associated with goodly creatures, although not always, and sometimes stories get a little more complex . . . or that goodly beauty has a dark side of viciousness. Ugliness is often associated with evil, although again, not always. Hags/witches are particular problematic, combing ugliness, age, and feminization as an evil combo!
If we decide to change some of those associations, we do end up changing the D&D race/monster . . . and it's easy to feel that these changes aren't needed, it's only fantasy, etc, etc. But I think taking a close look at all sorts of D&D races and monsters and reimagining some of them to move away from problematic stereotypes serves us well in the long term. As we reexamine these various creatures, we won't all agree on what needs changed, and it's a lot of work. But again, I think the conversations and the thought processes are worth having.
This is complicated when D&D adapts a mythological creature, and in doing so changes the role of that creature! If an elf is some sort of nature spirit, then is it okay for it to hold unearthly beauty and be largely considered good, if mischievous? But does that still hold if elves are now a mortal race, on par with humans?
As we change our ideas of how the game deals with race (sentient creatures), how important is
mythological accuracy? Especially when so many
myth-inspired D&D creatures aren't all that accurate before we do any revising! And of course, we are taking folkloric elements from oral traditions that were anything but consistent within cultures, and similar creatures could vary significantly between cultures. Fey/elves/fairies are a good example of that.
One of these days I want to write up a supplement de-coupling hags from the ugliness/female/old trifecta equating to evil . . . . but even I have a hard time imagining a good-looking, young, male hag! Although the hag-born (hexblood) lineage in the new Ravenloft book actually moves in that direction . . . you can be of any age, any gender, and any level of attractiveness and be a hexblood, or hag-lite. Or maybe you just have to break some of those associations . . . maybe all hags are ugly by human standards, but they aren't human, and they don't see themselves as ugly or evil . . .