I think the idea of Gygax's "good" is different than what we are prescribing for it. Humanity isn't "Good" as the alignments LG/NG/CG define it, though perhaps many are those alignments. Rather, he means that on a cosmic scale, there are more humans willing to do what is right rather than what is wrong. Not all of them do good things all the time nor are many of them willing to stick their own necks in search of greater goodness, but if a paladin and a blackguard are fighting in the center of their town, more would root for the paladin than the blackguard.
This is key to a game where we have to justify having paladins and clerics go into goblin warrens and slaughter the evil SoBs before they organize another raid on defenseless townsfolk. If the people the paladin is defending are as bad, or only slightly less selfish, cruel or bloodthirsty as those goblins, whats the point?
Admittedly, its sometimes fun to get thrust into a "lesser of two evils" scenario, but a world full of lesser and greater evils often leads to jaded, bloodthirsty "heroes" as well. Sadly, this type of "moral anti-hero" is becoming more popular again in modern culture (at least here at the US of A) so I can see the allure of being a selfish mercenary rather than a tireless champion of goodness.
As for my games, I'm running Eberron at the moment and enjoying a touch of gray to my otherwise blk/wht world. However, when I return in 4e to my homebrew, I probably will return to a more classic good vs. evil method, if only to to enjoy a relief from the terrible grayness that fills my days in the "real" world...