This is an interesting point and touches the question of the era the game is set in.
If you place a game in TOR's default timeframe (or the late TA in general), you are absolutely right, as the Shadow is strong and almost omnipresent in its challenge to the Free People. Sooner or later (probably sooner) any group will face a decision here - even if they are not aligned by default.
Things get more differentiated in earlier times, when the Shadow is present but weak (in fact in these times it is more occupied with building strength and hiding its nature and presence). The early 1400s are IMO a good example for that. Angmar is there (but relatively weak), the Necromancer (Sauron in disguise) is present as well but more of a local nuisance and Gondor not a realm on the verge of being overrun by its far more numerous enemies but the pre-eminent superpower in the Northwest in the afterglow of its peak.
Here the Shadow is present of course (probably more as a subverting rather than conquering force) but much less pronounced and the lines of conflict are more drawn among men of different outlook. Here more neutral characters are likely to find more room to act genuinely.
Interestingly, the Appendices of the LotR contain a few hints about more "realistic" and not-so-nice policies shown by the Dúnedain, rather than the almost otherworldly good ones like Aragorn (who of course is the most influential Dúnadan model for most players & readers). But that is natural, as you don't build an empire by being nice, noble and obliging to the people around you