To return to the tiger analogy brought up earlier in the thread, I'm not sure there's that much difference between tigers and mind flayers in terms of their ability to make moral judgements. We tend to assume that creatures with higher intelligence should be able to make moral judgements, because we're the most intelligent species on the planet in real life and that's what we do. But there's really no reason to assume that this is the case. After all, humans with high intelligence (for whatever definition of the term you'd like to use) don't necessarily act more morally.
It's easy to imagine a species with greater then human intelligence that utterly lacks the capacity to make moral judgements of any kind, or even recognize the concept. Such a creature would be terrifying....especially if it had tentacles and wanted to eat your brain. So for me, that's kind of the point, and it's why I treat mind flayers as neutral in my campaigns. No, you won't find any eating vegan brain substitute and running the local grocery store, any more then you'd find a shark doing those things. If you suddenly made a shark hyper-intelligent, they wouldn't stop being a shark. And sharks aren't evil. They're just sharks, doing what sharks do.
I kind of like the idea that this makes Mind Flayers mutually incomprehensible not just with humanoids (all of whom are capable of making moral judgements, even if they often don't behave morally), but also with demons, devils, and other outsiders. For demons and devils, cruelty is the point. They're essentially made out of cruelty and hatred. Mind Flayers are so alien they can't even process the concept of hate.