I find that argument flawed.
Nothing says evil or chaotic characters cannot have friends or similar individuals they bear some loyalty to. Even psychotic antisocial misfits can potentially find someone they can get along with, somehow, probably....
Group allegiances do not change whether an individual is evil or chaotic or whatever. If a PC often harms good people, he/she is evil. D&D cosmic forces of alignment don't care if those good people are the enemies of his/her state or what propaganda his/her leaders spoonfed him/her to believe those enemies to be evil. The primordial essence of good still slaps his/her metaphorical wrist and sends him/her away to the Lower Planes for it.
Chaotic is not usually synonymous with 'completely erratic and insane'. That only really applies to things like Slaadi and Demons, or their ilk, not mortals. Few mortals are purely chaotic.
Evil is not usually synonymous with 'hates everyone else completely and forever and has not a single drop of decency or comradarie whatsoever'. Evil people can have friends and family and allies they care about, they just don't care about anyone outside that small circle of allies. Only Fiends and such tend to be completely devoid (usually, not always) of any hint of Good in their personality.
And what's the problem with assuming the average person to be neutral? There's nothing really in the rules that says most characters in a world are good-aligned or something. Neutral generally doesn't mean they just don't care, instead it usually means they just won't stick their neck out for anyone outside their immediate friends and family because it's too dangerous or expensive or inconvenient. Or that they have complex personalities and circumstances, which don't quite tip far enough one way or another to warrant cosmic favor, or disfavor, by any particular primordial force of the D&D Multiverse.
Nothing in D&D ever said Lawful people have to get along, either, or that Good people have to get along. Just because you and your neighbor are both nice people doesn't mean you can't potentially come across a topic or situation that you just can't help but come to blows over. Paladins themselves even have multiple ways they can be portrayed and still qualify as paladins in their behavior and without straying from LG; many folks just assume an excessively rigid definition of LG + paladin's code that the rules don't really support exclusively.
Early D&D was based at least partly on the Elric series if I recall correctly, which is where it got the initial concept of law and chaos being the major ethical forces of the multiverse. Again, IIRC. Then it later broadened out and involved the more traditionally romanticized conflict of good versus evil, as part of the alignment system, I think.
And I find your last point to just seem rude somehow. D&D developed from a tactical miniatures wargame where the whole objective was to defeat the opponent's army and reap the spoils of war. Which evolved into dungeon delving, slaying inhuman monsters, and taking the treasure they had most likely obtained from the slaughter of previously-visiting humanoids, then going back to town and selling the loot for personal gain, after going to the trouble of wiping out the dangerous monsters and avenging those humanoids they had slain before. At least, sometimes that's how it was, right? Then it evolved into more complex adventures at some point along the way or shortly afterwards, I think.
Of course heroes always get the treasure and fame after they defeat the monsters and save the townsfolk/princess/kingdom/whatever in myths and fairy tales. What do you expect?
Yes, the alignment system in D&D partially justifies the whole adventuring lifestyle of killing monsters and taking their stuff. That's always been the main point of D&D, hasn't it? Sure it branched out into other roleplaying stuff too, but at the heart it's about adventurers going out and slaying monsters/villains and taking their loot, whether it's for the greater good (exterminating evil) or for personal glory and wealth. Other forms of roleplaying are fine, but they are not what D&D was generally built to support in the first place, so it has to support its original premise at least somewhat.
Like it or not, historical wars and crusades and junk have often been more about money and prestige than about right and wrong. Barbarians raided and pillaged for food, valuables, and women. Knights marched off to war for glory and the chance at taking some choice loot from their foes or being payed nice sums by King or Church for their efforts. Countries made war for the sake of gaining land, loot, slaves, peasant labor, resources, and tribute. And so on and so forth.
D&D supports the same kind of activities in its fantasy settings, as long as the DM uses alignments to properly portray each force and relay to the players what the consequences are. They may be the defenders or the warmongers, it doesn't matter; if they're the defenders, the invaders are probably evil creatures, unless the DM is trying to force a moral quandary to get the PCs moving elsewhere to try and stop the war nonviolently. If the PCs are the invaders, then the enemy group is probably some evil humanoids, or fiends, or whatever; unless the PCs are evil themselves, of course, in which case the enemy group could be anything. But D&D assumes the typical Player Characters to be heroes of at least slightly-good intentions.
Now of course if you're a total pacifist or one who simply thinks all killing is outright wrong no matter what, including imaginary killing of imaginary villains, then of course D&D isn't the game for you; combat is its centerpiece and at least partly the focus of most adventures/campaigns. But in a fantasy world like D&D, where demons and devils and cultists and hobgoblins and orcs and red dragons are all about, mercilessly destroying innocent people and looting their corpses, you can't really justify standing around and doing nothing as a pacifist. Those same monsters will continue committing unspeakable acts until everyone else is dead, and it would be wrong, Evil in fact, to just allow that to happen if you are in fact in a position to do something about it.
This is the world in which D&D characters live; where monsters and villains run amok and somebody has to do something about it, or all life will end and, in fact, even the Upper Planes will be vulnerable to attack and then everyone's immortal souls will probably be dragged kicking and screaming into the Lower Planes, eventually, for lack of anyone fighting the evil beasties. It wouldn't be heroic if there were no villains to defeat; saving puppies from wells and kittens from trees would hardly be exciting day-to-day adventuring for a band of intrepid heroes.
And not everyone wants to deal with grey morality being the only morality in the game. Having to constantly struggle with our characters trying to gain acceptance as heroes and not pegged as homicidal maniacs is generally not fun on a daily/weekly basis. Generally, most gamers are not, in fact, masochists.
I was thinking that the logical consequence of saving the orphans for publicity's sake alone would mean that you *started* the orphanage on fire just so you'd have a chance to save them (and thus we'd get the disrespect for life that Evil is famous for), but there are many valid interpretations of alignment.
