I agree that alignment is ridiculous most noticably because of it's obvious limits. After all, it was constructed for a RPG world where "good" and "evil" are supposed to be easily distinguished. If they weren't, paladins and the like would end up unemployed.
Let's say that a character is CE (Chaotic Evil). That doesn't mean he/she/it has be CE since birth - the culture, social upbringing, family conditions and so on are going to shape the alignment of that individual (unless you believe in some kind of inherited sin, that is

). The alignment of this person had not necessarily been apparent at the time he received "training" (if such training was available - the skills you obtain doesn't have to come from any kind of "formal" training, that is, with a teacher/master/elder).
And yes, a CE character COULD end up killing dogs in the street, beating up old people and such IF he found that kind of behaviour enjoyable. Had he also been of low INT he would most definately end up in a jail cell sooner or later. But in pretty much the same way, Minsc would have been brought out of bg by a group of serious looking men in white lab coats before he had had the chance to even end his very first sentence, no?
On the other hand, consider an organization such as the Mafia. Would you characterize its members as Good, Neutral or Evil? Lawful, Neutral or Chaotic? I believe they would lean towards the Neutral Evil side as their choice of career is breaking the laws at the same time as they are aware of the necessity of being organized in a strict hierachy with a code of conduct that you better not disobey.
Had an evil character been part of/hang-around to such an organization, there would have been quite a bit of (not so nice) "quests" that were needed to be taken care of. The Mafia could rather easily be transferred to a Fantasy world such as that of the BG-series (The Shadow Thieves? Still a bit too not-Evil quests you got from them in BgII, but Maevar was promising, as long as your service to him lasted). So therefore I do not really see why it would pose any real problems concerning the game contents, but on the other hand it could become a subject of controverse whether or not computer game producers should make it clear that other career paths beyond that of the Good Hero are available in a Fantasy world.
Fallout I&II were very enjoyable when it came to playing diffent kinds of "alignment" (though as I remember it you didn't pick one at the beginning of the game?). I would have wanted more of that in bgii, but it was rather a disappointment when it came to evil choices that one could make. The npc:s were also a bit on the lame side compared to bgi.
Well, the very title of B&W says it all, doesn't it?