Now then-- Considering that the only way for this to happen is to destroy the current creation, it can well be said that Daggoth Ur wants to "Destroy the world"-- but, is that really a bad thing?
:facepalm:
That's not just genocide - that's mundicide ...
It's one thing for the hero to want to kill all the monsters and another thing to look at the destruction of an entire world.
At the start of creation the et'Ada were given a choice - did they want to try the new thing in th eGrey Maybe? It may not have turned out as they envisioned, but they had a choice. Here Dagoth Ur is engaged in taking away everyone's choices but his own - Whether you are a supporter/fan of either Order or Chaos YES that is a very bad thing = naughty Weird!
Also Dagoth Ur is busy turning people in to what they believe to be monsters - YES that is a bad thing , etc from their point of view ...
Alternatively throw out the concepts of good and bad, refuse to admit that anything is bad, and then nothing is bad. Oops - that also destroys choice because it eliminates a very important basis for thought. Follow that road too far and you mentally flatline.
Cease to look at this as a mere intellectual exercise unconnected to anything and look at the whole from the inside ... and you may find that designating certain things as shades of evil is a very useful way to look at them. Hopefully without totally leaving the ES tradition of shades of grey behind.
Tamriel is not a purely Good-Evil scenario - but there is both good and evil in there - denial does not eliminate it.