This is something I'd never fully connected in my head: were I Redcloak, that experience of "entire family massacred, receive sacred message explaining the situation, receive divine orders" would be pretty hard to ever let go of.
I know you're not actually justifying the wholesale slaughter of goblin civilians and children, but the rhetorical device you're using kind of implies that. By nature of his knowledge and goals, the former High Priest was a threat to reality (though given that he was taking the time to visit a small village and ordain some minor clerics, he seemed to be doing much more "guiding the flock" than Redcloak ever has). That threat does not extend to ANY goblins that didn't know about The Plan. Of course the paladins would assume all the goblins were "in" on The Plan. The fact that they were not makes the scene that much more tragic, and drives home the injustice Redcloak experienced.
Nobody is giving Redcloak "a pass". His actions are evil. He is evil. The attack on Azure City was evil.