Such an old argument, but one I see almost every week somewhere on the internet, so I might as well state my piece. Here is my response to what I consider the three most annoying parts of this discussion:
- "You can't do that because you're Lawful Indifferent" - this phrase should never, ever, be uttered by a DM and probably not by another player either. Players are in control of their characters, not the ref. Blocking behavior based on the alignment written on a character sheet is like trying to slow down a car by pushing the speedometer needle back! Alignment is the gauge, character behavior is the engine. Much like the red line on a speedometer, the DM is free to warn the player that doing X means an alignment change to Z, but whether the act takes place is still up to the player.
- "It's a straitjacket" - why? It's intended to be an aid to roleplaying, a label for you and others to use when looking over your character. Perhaps you picked the wrong alignment if it doesn't mesh with what you want this character to do. Have the character act as you see fit and let the DM shift your alignment to whatever best fits. If you're having some angst over whether a particular act fits with your character's alignment that's not a sign of a flawed system - that's an opportunity to take a deeper look at your character and how they really feel about the world.
- "It's not realistic/too simplistic" - the rules of the game (for D&D at least) define how the game world works. I never hear anyone complain about Detect Magic - there is magic in the world and this low-level spell allows one to determine what is or is not magical and often what particular flavor of magic it is associated with and how powerful the effect is. Everyone seems to be cool with that. There is also a "Detect Evil" spell, and it works exactly the same way and does the same thing. Clearly, in D&D settings, Good and Evil and Law and Chaos are just as powerful and defined as "Magic". Every edition of the PHB has a pretty solid breakdown of the kinds of behaviors that are associated with each combination of these elements and their view of the world. It's not intended to model the real world- it's intended to model the D&D world and it works pretty well. In the D&D world good and evil are not relative or dependent on one's point of view - they are objective and measurable! If you want to reduce alignment to something as simple as "picking your team" that's certainly possible but you can handle it with quite a bit more complexity and still keep the mechanical aspect in place.
Now sure, we've all heard the stories about the DM that has it in for the players - especially Paladins - and is constantly jerking them around with alignment issues. First, these are typically stories from the old days and yes, there were a lot of jerks back then. Second, why would you play with these people? There are so many people who play, and so many ways to play today (organized play, game store nights, online games) that there's no reason to spend your leisure time with people you do not like - so don't do it!
So yes, I'm sure some people have had bad experiences and reject alignment because of it. I see it as a tool rather than a weapon. It does require some DM involvement to keep players clear on the expectations, assumptions, and consequences, but it's a traditional part of a D&D game just like classes and levels. I've never had a reason to play D&D without it. I don't think it's essential to every RPG, I've played plenty that have nothing like it, from Star Trek to Shadowrun to Superheroes, but I think it's a notable part of D&D (and Pathfinder) and shouldn't be jettisoned without consideration.
Ironic note: 4th Edition de-emphasized alignment to the point where there was no Detect Evil type ability and that did not help its popularity at all as far as I can tell. I'm not sure if that means anything, but I thought it was worth mentioning.