Just because you can convince yourself that genocide is a good thing doesn't compel anybody else to agree with you. Gods will cut off your powers, magic artifacts will still twist in your hands, and actual Good aligned people will strive to stop you. Especially in a high heroics/high fantasy setting where Good and Evil (along with, for some reason, the poorly defined forces of Law and Chaos) are tangible things. I'm not liking the idea that spells of pure Good shouldn't be effective against powerful fiends, who can just rationalize away the effects.

That, and in the real world, people of average intelligence are more than happy to pick up on rationalizations for why things that have no rational benefit are in fact Good. Consider the popularity of the Lawful Stupid paladin trope. Or basically any political act that harms a fair number of people to no actual benefit, all because some hysteria is whipped up. (Furthermore, I'd wager that the people whipping up the hysteria are rather bright, doing it for some unrelated purpose, and rather evil in spite of their having the stats to supposedly handwave things away.)

What it comes down to is this. If you dislike objective morality, strip it out. (I know 3.5 makes it hard, but it's better than trying to leave it half in the system.) Alternately, scrub alignment from the character sheet and have alignment-based effects only apply based on subtypes or class features that specify an aligned aura. Your system sounds like a lot of extra work - and stat tax - just to halfass a position of not liking alignment.