Every time people lament changes to the lore that amount to "not every member of species X is irredeemably evil" and claim the game is removing villains from it, I think how villains of so-caleld evil species fall into two cathegories: a) bland and boring and b)have something else, unrelated to their species going on for them, that makes them interesting.
Your number 2 is based around cultural, not species differences. Two humans raised in two different cultures could end up very different.
There could be two tribes of goblins. One that began eating people out of desperation and now just do it because it's tradition. The other could have grown up in close relationships with their nongoblin neighbors and are seen as a valuable part of their region.
So untying evilness to their race isn't being race blind or pretending people down have struggles - it's removing the shoehorning that occurred.