Ironically it's actually a reason to eliminate most of the current playable species and reduce it to human, half-elf and half-orc. Players actually have no interest in getting into a non-human perspective, so let's not even bother pretending.
I guess I misunderstood. When writing my response, I viewed it as the same. Your quote from TVTropes,
seems to view them as the same. The heroes, in my case, all the movie and book protagonists I presented, are almost always considered to be in the right. The villains are in the wrong. Can you please explain what I am missing?
The difference is, heroes can be in the wrong, some of the time, though they end up more right than wrong, or become so overall over time. Likewise, true unrepentant villains can be morally correct some of the time, about some things, but overall or ultimately they will end up more morally wrong than right.
100% pure B/W doesn't allow that. Villains are 100% evil forever. Heroes are squeaky-clean 100% good forever. And yes, this is in the thing I quoted. It mentions that villains are always wrong, about everything, at least morally. That, plus heroes being 99.9% incorruptible pure pureness. Either it's impossible for the heroes to do wrong, or it isn't impossible, but it's revealing their true colors--they were never really heroic to begin with.
Here's a good quote, from Ben "Yahtzee" Croshaw on Fully Ramblomatic, talking about the same thing:
"Imagine the poor bastards on BioWare's writing team, all keen to apply their characteristic complicated storytelling and nuanced moral choices, when they were first told they had to work with the naughty word Star Wars universe. "There's two opposing groups, right? One side are space monks dedicated to peace and justice, and the other are genocidal murderers who dress up in black robes and skull masks and all have names like 'Bumplete Castard'. Now, write a story about that with some subtlety to it."
Star Wars has almost no subtlety unless you work really, really hard for it. The only hope for any villain is suicide in a way that is helpful to the heroes.
Perhaps it would be more instructive to use a well-known example of a work that does have sharp moral distinctions...but is also a world where people can be complicated, even if morality is not particularly so: Avatar: the Last Airbender. Aang, Sokka, Toph, even Katara, are all heroic people...but not one of them is 100% squeaky-clean completely free of ambiguities. Katara is 100% happy to murder the guy who killed her mom, for example--vengeance, not justice, a deeply unheroic motive from an otherwise extremely heroic character. She is allowed to be just the tiniest bit grey, even though by and large she is THE most pure-as-the-driven-snow character, morally speaking, even moreso than Aang.
The Fire Nation, as an institution, is clearly The Bad Guys, and both Azula and Ozai are villainous. We see Fire Nation soldiers being cruel and horrible on the regular. That, pretty clearly, shows that there is a bright-line distinction between good and evil--crisp and firm. Yet we also see that Azula is a deeply messed up, 14-year-old girl, and she goes through a painful psychotic break, which is not in any way characterized as some kind of deserved punishment, nor played for laughs. It's heartbreaking...and yet she is still, unequivocally, a villain: "No, she's crazy and she needs to go down," from the mouth of Iroh himself. And both Iroh and Zuko are living proof that being Fire Nation ethnicity doesn't make you evil--it's buying into Fire Nation propaganda that makes you evil.
Hopefully, that helps. I trimmed this down from where it was before, so I hope I didn't trim it TOO far.
Edit: And for an example from the other direction...Adam West's Batman. Stories like that have such incredibly squeaky-clean heroes that it becomes full-on B&W morality. West's Batman isn't just a goody-two-shoes who never even pokes his head out of a shadow, in that world, he's an official deputy of the police force, so he isn't even a vigilante anymore. He actually does legally arrest people and have them arraigned by the police. The Gotham Police are never corrupt; at worst, they're simply bumbling but well-meaning. Batman himself never breaks the law if he can avoid it, even though Batman in the comics kinda...has to break some laws (e.g. breaking and entering, stealing evidence, assaulting private citizens, etc.) to do most of the adventures he does.
Adam West played the character well, and there is a certain charm to his story. There's a reason people love it, despite knowing it's campy. But it's also pretty...flat, and usually the conflict is pretty boring. We enjoy it for the campy way they do it, not for the story itself.
Comparing the depiction of Thrawn in Zahn's novels with his depiction on TV is a good example of this. In the novels, he is generally depicted as right, if ruthless. But on the TV he has been reduced to an always-in-the-wrong villain.
Attempts to deviate from B&W morality in Star Wars have been mixed - Andor was well received, but The Acolyte was met with howls of anger.
The Last Jedi struggled because it switched from grey to B&W in its 3rd act. Suspect studio interference happened.
The OP talks about how he finds it jarring that groups do not reflect the campaign setting. My solution to that was to suggest that the main problem is that character generation is often done in isolation, away from the group and therefore, to fix the problem, don't do character generation in isolation away from the group. If chargen is done as a group exercise, with everyone talking to each other and collaborating, then the whole "wildly diverse circus troupe" group goes away. The group now has a reason to exist as a group and you no longer dump all the work onto the DM to figure out how to make a group created in isolation actually work in the setting.
The OP talks about how he finds it jarring that groups do not reflect the campaign setting. My solution to that was to suggest that the main problem is that character generation is often done in isolation, away from the group and therefore, to fix the problem, don't do character generation in isolation away from the group. If chargen is done as a group exercise, with everyone talking to each other and collaborating, then the whole "wildly diverse circus troupe" group goes away. The group now has a reason to exist as a group and you no longer dump all the work onto the DM to figure out how to make a group created in isolation actually work in the setting.
Tell your prospective players, "Please don't start building a character until we meet up to do character creation together. I understand that folks are often drawn to character concepts very early, but it will be better for me, and I believe better for everyone, if we wait to do any character-concept stuff until we can all meet together and discuss it."
That way, the group can nip problems in the bud, and can start from a position of having strong connections between the characters. Then, even if it IS a "circus troupe", the GM will know why that troupe hangs out together, why they'd stick with each other through thick and thin.
One thing that I don't think has been mentioned is how long is the character expected to last? My campaigns typically last 1-2 years, so a player is going to be with the same character for a very long time. So they need to be very comfortable with them. And it also gives plenty of opportunity to reference background details down the line and create "frontstory" relationships.
But if you are only expected to be playing a character for a couple of weeks, firstly there is no need for a player to be so comfortable with them, and secondly, you want background connections that are likely to come into play early on.
Ironically it's actually a reason to eliminate most of the current playable species and reduce it to human, half-elf and half-orc. Players actually have no interest in getting into a non-human perspective, so let's not even bother pretending.