I played a 3.5 eberron campaign as a Telepath Psion who used mind-effecting powers nearly exclusively, including dominate. I played him as LG. Or, he believed he was LG. YMMV.
He always tried to use diplomacy first in any conflict if it could be helped. He didn't use any mind-effecting powers for diplomacy, but he was very good at it, and he avoided some fights.
He actually had a power called Telempathic Projection, that could give bonuses to diplomacy by influencing another person's mood, but never used it, as he felt that was a bit underhanded in honest negotiation.
Once combat broke out, his justification was this: dominating his foes robbed them of their free will, yes... but temporarily. Death also robs a person of their free will, and permanently. Mind-control was the lesser of two evils then, because his foe would live to see another day. After the combat if his dominated foe was still alive he would force them to flee.
He also recognized that mind-effecting every opponent was impractical, and used powers like Mind Thrust as well.
I think he was LG, but you are free to disagree if you want. One party member would regularly tell him he was evil, and he did build up a rather terrifying reputation.... shrug