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Personally, I don't see why anyone would play a Principled allignment unless they were playing a paladin.
I would. I've played several principled characters, and they've been my favorites. And yes, I'm one of the ones arguing for enforcing the alignment.
It's an alignment for characters ruled by honorable philosophies, and all the roleplay that comes with the resulting friction. And that alignment (ideally) gets you recognized as a safe friend by anyone but the most evil. Great for playing preachers, diplomats, and other civilization-builders for example. Faster levelling is another plus; lighties generally have better training zones, and you get the full alignment disparity advantage.
No, it's not for people seeking to make a splash with PK, but that has its appeal. And if you like PK in moderation, it's easy enough to get into a position that will force you to fight for good cause - tribunal membership if nothing else. And if your PK is moderate, are a few items you can't steal really that important?
However, principled characters can't be recognized as generally good to people, when they're killing people with abandon. Permitting people to grossly violate the alignment makes it lose value, along with the rest of the alignment system.
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I know that sounds weird, but diabolics should be punished for having any sort of long lasting loyalty to groups/players if principles are being held under this scrutiny.
Absolutely. All alignments should be enforced. Maybe then we'll have less silliness like a diabolic leading the Harlequins, to take one well-known example.