I think the relative snub from high brow literature circles has less to do with good and evil and more to do with an unwillingness to put Fantasy on the same par with "real human drama". As very real as the human drama in LoTR is, there are people who cannot consider it to be "real" literature because it is a make-believe world.
Most stories are good versus evil at some level. Even morally relativistic people don't look at a story and say "this story has too much of a moral goodness in it". I don't think people don't think that way, do you?
Hello, H.O.T.Dog,
I agree with you about the fantasy-fiction thing. It's sad; fantasy-fiction is a very bypassed genre in English Literature departments.
As to the moral relativity thing, I do believe it's true: English Literature departments are incredibly politicized, and they don't mostly look at material in terms of how well it tells a story, but how pointedly it makes a political point that they want made. Such points tend to be far-left and morally relativistic.
Sad. I'd put LOTR and The Chronicles of Narnia on every reading list I could.