I love the idea of "Smite Evil" being based on the Paladin's beliefs about the target, and not some inherent Evilness of the target (mostly because I can't stand alignment as a quasi-physical property of things; it shouldn't be anything more than a broad description of beliefs and behavior patterns). That doesn't mean it's "Smite anything", though. The Paladin can still have a Code. If it turns out that he smote something undeserving, a Paladin should be wracked with guilt. Don't make him "fall" because some immaterial, unknowable force made him fall to punish him. He should fall because he comes to believe that he deserves to fall.
I like the fact that Paladins can choose who they think is evil, and who isn't. And act according to what they think is true. I reject evilness as something that something is. Or goodness, or chaoticness, or lawfulness. It's cartoonish and silly.
I think it's far more interesting for a Paladin to smite something, successfully, and later find out it wasn't really evil after all, than for a Paladin to smite something, then rest easy knowing that it was inherently evil (or else the smite wouldn't have worked), so he was automatically right to kill it; no muss, no fuss, no thought, no drama.
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The Paladin would still have a code. An honest (Good) Paladin would not lightly judge others as evil, and upon judging wrongly, would be horrified to discover his mistakes. A dishonest Paladin might very well find NPC Paladins hunting him down for his betrayal to his code.
Yes. This is exactly how I like paladins to play out.
The first paladin that I GMed was in my first long-running Rolemaster campaign. Rolemaster's combat system is wound-based, and many times a target will be disabled without being killed. The first time the paladin actually
killed a person was around 5th level, when the player rolled a 00 on a crit with his two-handed sword.
The paladin went into repentance, and headed out into the wilderness to pray. I rolled on the slightly overblown Rolemaster random encounter table and got a minor demon. Which came up to the paladin and started taunting him about how he'd done the wrong thing, could never be forgiven, the demon was here to punish him, etc. Now I expected the paladin's player to reason "Because this is a demon it must be lying; hence I am forgiven; hence I can kill this demon and then go and rejoin the party". But in fact he reasoned "I've done wrong; I've done such a wrong thing that my god has sent (or let come) this creature to punish me." And then the PC did not resist as the demon beat him senseless, before getting bored and wandering off elsewhere.
As you say, the well-played paladin will create and manage his own moral dilemmas well enough!
A more recent example in my 4e game involved the dwarf fighter-warpriest of Moradin (who is technically not a paladin, but near enough). The party wanted information from an evil priestess they had captured. The dwarf - who was also, in this context, the public face of the party, was sent off to do important errands while the party interrogators went to work. As part of their interrogation strategy, they promised in the dwarf's name to do their best to stop the prisoner being executed for her crimes, if she would reveal the information. This worked and the got the information. Now these PCs, being a ruthless bunch (all unaligned, one a paladin of the Raven Queen, one a very righteous wizard-divine philosopher of Erathis, one a drow chaos sorcerer and Demonskin Adept), were getting ready to break the promise and hand her over for execution. But the player of the dwarf getting bored, he had the dwarf come back into the interrogation room. At which point the NPC explained about the promise that had been made in his name. And so - to
everyone's annoyance, including the player of the dwarf - he became bound to do what his agents had promised he would do, and arrange for her not to be executed. Which he did. (The player of the drow complained to the player of the dwarf, "Don't arrange for us to do your dirty work and then come in half way through, compromising the op!")
The well-played paladin will create his/her own complications arising out of the code, and the unwillingness to compromise.
Alignment rules are superfluous. If the player doesn't want to play this sort of character, alignment rules won't make him/her do it. And if s/he does, alignment rules just get in the way.
So you like the fact that Paladins can choose who is evil and who isn't?
Instead of something being actually evil, the Paladin can make that choice for them and Smite the hell out of them.
It is the
player making choices for his/her PC. The alternative is that the
GM makes choices, by enforcing alignment rules. I don't see what that adds to the game. Whereas I
know what player choices add to the game - see my two anecdotes above (and there's plenty more where they came from).