These complaints exist mostly because of the sloppy writing of later editions and various alignment-based abilities that made more of what alignments than what they were originally designed to be. It's a form of feature creep that takes an older idea, fails to read it properly or digest it completely, and tacks on some shiny new powers, skills, or monsters to make use of that idea. I challenge you to go back to the source material in Second Edition and locate where alignments are described as straightjackets! I challenge you to uncover where they say that a LG person like a paladin is an unforgiving bastion of smiting and evil-murder.
You won't find those things. That's because alignments are woefully misunderstood by most of the modern gaming audience and EVEN BY THE MANY DESIGNERS THEMSELVES. For simplicity sake, let us imagine that you have never heard of alignments before. There are two axis: the Good/Neutral/Evil axis and the Lawful/Neutral/Chaotic axis. These two combine in meaningful ways to form a description (NOT a proscription) about how a character acts. Those who believe alignments are too restrictive take note:
Remember, however, that alignment is not personality. If every lawful good merchant is played as an upright, honest, and friendly fellow, NPCs will become boring in a hurry. Just because a merchant is lawful good doesn't mean he won't haggle for the best price, or even take advantage of some gullible adventurer who is just passing through. Merchants live by making money, and there is nothing evil about charging as much as a character is willing to pay. A chaotic good innkeeper might, quite reasonably, be suspicious of or hostile to a bunch of ragged, heavily armed strangers who stomp into his inn late at night. A chaotic evil wizard might be bored and happy for a little companionship as he sits by the inn's fire.That is straight from the AD&D DMG. Interesting, isn't it? Alignments are not a guarantor of behavior, or at least where not meant to be. Let's discuss exactly what alignment was designed to mean and why it's useful. To do this, we'll take a look at the individual elements first.
Good. While good and evil are loaded terms, you're going to have to separate yourself from what they mean morally. Good characters are not necessarily "good people." Evil characters are not necessarily "bad people." Good characters can be unpleasant, despised. Evil characters can be charming and friendly and even loyal! What does good mean, then, in this instance?
The good portion of the D&D alignment axis means "altruistic." They are honest, charitable, and forthright—not all the time, but when they aren't they attempt to make up for what they've done, or they feel bad about it. They help others and think of people other than themselves.
Neutral. In terms of good and evil, a morally neutral person isn't someone who does not see the world as divided into "good" and "evil." A morally neutral person doesn't recognize those distinctions as being important. For that reason, this alignment places much more emphasis on the other part of the axis that describes the character's stance on law and chaos.
Evil. Evil on the alignment scale doesn't mean mustache-twirling. What it means is a disregard for the affairs of others and a willingness to injure others in order to achieve a goal. Evil characters are very rarely cognizant of their own evilness. They never do things just to be evil, or because they are meanies.
The lawful/chaotic end of the scale is even easier.
Lawful. Lawful characters believe that the universe requires order to function. Rules are important, and not to be broken lightly. This is not adherence to some kind of "personal code" but rather a real respect for order.
Neutral. Neutral characters on this scale don't care about law and chaos. Order can be good, but stultifying. Chaos can be freeing, but ultimately unrewarding. Here, again, one is encouraged to look more to the good/evil scale.
Chaotic. Order and rules are unnatural and get in the way. People are free, and order is imposed. Again, there is little "personal code" here, though a case could be made for one. Chaotic characters would be unlikely to develop a highly articulate code, however, since such a thing smacks of rules and regulations. They might have a few basic guidelines, but following a rigorous outline of rules is a lawful act, whether or not it is the one currently recognized by the government in the place the character is located.
A note on True Neutral (Neutral on moral and lawful scale). This has long been decried as the "unaligned" alignment. Oh yeah, everyone agrees, neutral neutral? True Neutral? They don't care about ANYTHING or ANYONE. They are just people. Most people are true neutral. Really? When was the last time you met someone who couldn't be described as generally one way or the other? Old school True Neutral means a devotion to the Balance; it is an active philosophical stance that believes no one force (good or evil, law or chaos) can be allowed to grow too powerful lest it consume the other and thus ruin creation. Druids are true neutral.
There, not so hard, was it? Did it hurt that much? I'm willing to talk about this at length, if anyone wants to take the other side of the argument. I've never really heard it articulated well beyond "alignments make it hard to roleplay!" which is, of course, nonsense. Alignments are a tool, one of many, used to describe the behavior of your character. And in combination they are more complex than you might think.