I mentioned these already. They both svck, particularly the DB since you're doing good. But then unless you're metagaming there's absolutely no indication that killing Grelod would lead to destroying the Dark Brotherhood. That's poor quest design, IMO.
You kill him in self-defense. He attacks you eventually when you don't do anything. You can then ignore Molag Bal or kill the priest of Vaermina(?). No big loss.
You can kill the cannibal right there and solve the problem. Or you can get her to bring out the rest of them and the kill them all.
How? All she did was invite you. She tried brainwashing you into joining her cult. This is one of the few Daedric quests with a "good" route in that you can choose a different outcome by doing what I mentioned above. You "fail" the quest, but for a "good" character, isn't it better that you do? The quest isn't cut off from you. You can still complete it, but not in favor of the Daedric Prince.
Both Neloth and Frea say outright that you have the power to refuse him. Only by going back to his realm and reading his books do you actually give in to him.
You don't have to kill anyone. You're not forced to. Three of the five of the Companions are even working to get rid of the curse. It's stupid how you're forced to gain the beast blood, and there should have been an alternate route, but it isn't necessarily "evil". The whole quest is about purity and corruption, with purity overcoming corruption if that's what you wish. (By healing yourself and Farkas/Vilkas after the end of the questline).
I much prefer it this way. I'd rather this than any unfortunate implications that might come from making one side the obvious bad guy and the other the obvious good guy. It happened with the Thalmor, but that's poor writing for you.
I'd say the Greybeards and Paarthunax would be more of the "good" side. At least they tend to invoke it better. This is another morally grey one, and either side could be seen as "good."
Seems to me that what people are looking for is a justification to do things that would otherwise be seen as atrocious. (Like commiting mass murder and then telling yourself that you made the world a better place by doing so. You may be mostly right but the thing is you still killed a hell of a lot of people who probably had no choice in the matter.) The Blades, for example, truly believe that what they're doing is the right thing. Dragons are, after all, tyrannical by nature and even Paarthunax says as much.
If anything, I'd say it makes for a much more interesting "Paladin" playthrough. As the saying goes: "With kindness comes the risk of na?veté. If left unchecked courage becomes foolhardiness. You must also understand that dedication has no guarantee of reward. If you can't accept any of that, you are not fit to be a Magical Girl hero."
Nobody's perfect. Those that are tend to be boring and uninteresting. I'd rather not play a caricature. Real people make mistakes and it's learning from them and staying true to themselves that makes them interesting. (Or obnoxious, if they're the lawful good kind of paladin.)
Then again, the game reeks of poor quest design, "good" or "bad" motivations aside. And bad writing and/or presentation all around.