The fiction you wrote, however, basically inverts the entire concept of intrinsic evil (which D&D has, as the game has always contained alignment - albeit in various forms - as an objective measurement of ethical/moral issues), to its detriment.
It's not fiction. The individual is, but not the circumstances. It is explicitly noted in Tyrants of the Nine Hells that devils who possess non-Lawful Evil alignments
do happen, once in a blue moon. It's also noted that they are destroyed ruthlessly by the militaristic systems that exist in Hell.
All my scenario presumes is a blue moon within a blue moon, i.e. a rouge Devil that also happened to have been born/created with enough power (maximum hit dice, a Paragon of his kind, or however you want to roll it up) to evade the system and escape.
I understand that that is your opinion, and I certainly respect that, but it rather offends me that you say I have affected the very alignment system and concept of intrinsic evil in a detrimental way by changing something when I am, in fact, quoting from the books themselves. The only assumption this scenario makes is the same kind of assumption that gets frequently made in the game for the PCs themselves. Namely, that an insane coincidence within an insane coincidence has occurred.
exemplify the alignment traits of their native realm - no fiend is ever "born" against the alignment of its type.
Would you like me to quote the passages in Tyrants to you that refute that? Not only is it clearly noted that they can in fact be 'born' against type, but it also clearly outlines how Angels can fall (and how, on extreme rare occasion, Devils can rise).
Did you forget that Devils are all fallen Angels? The very existence of Devils proves that Outsiders can be born or choose against type.
My rule is that heroes should be punished for their heroism
I'll make a note to never play Dungeons & Dragons when you're the DM, then. PCs should be
rewarded for being willing to give up things for the sake of role-playing. Otherwise, you're just encouraging everyone at the table to be as Neutral as possible, because going out of their way to attack evil or help good isn't going to be rewarded beyond whatever personal satisfaction they get from it.
Even the mechanics of the game itself point against doing this. The entire concept of Voluntary Poverty is that you give up everything except the clothes on your back because that's what your character believes in, and in exchange, you get enough innate scaling bonuses that you make up for it and then some (especially if you're a Monk, and already designed to fight without a weapon anyway).
Hell, there are
Feats, both in Exalted and elsewhere, that exist
only to reward those PCs heroic enough to earn them. And Prestige Classes. There are Prestige Classes that
literally cannot be accessed unless you do things ranging from taking more restrictive moral and personal oaths, to literally sacrificing your life for a greater cause (Living Martyr, which draws it's inspiration from Gandalf the White and Jesus post-resurrection).
Having a heroic sacrifice be rewarded with some sort of pay-off undercuts selflessness that such actions display, at least to me.
Only if the PC roleplays their character as having made the sacrifice only for the selfish reason of expecting a payoff. It's unreasonable to demand that a player not be allowed to take a heroic or noble prestige class that requires genuine sacrifice because that's what they were planning on doing all along (i.e. I want to play a Living Martyr, so at some point, I'm going to sacrifice my life for us to escape or succeed), but letting that bleed over into the character itself is a bad, bad idea.
If you actually put your style into effect and enforced it, then no PC would have any reason to be anything other than Neutral or Evil, because when they play Good, they end up getting screwed out of the equivalent things they
could have gotten if they had been uncaring or a selfish bastard.
Dungeons & Dragons is a game about earning rewards through adventure. Denying those rewards on the basis that good should be it's own reward is asinine in the extreme. This isn't good we're talking about, here. It's Good?. An energy, a force of the cosmos itself. Oppose it, and it will destroy you. Serve it, and it will reward you. That's kind of the entire point. If Good was it's own reward in D&D, then Evil would have won a long,
long time ago.
And maybe you like that idea. Maybe you want to play in a world where Evil won eons ago, Heaven is a blasted ruin, and good is as fleeting and pointless in this hope-devoid world as defying our Fiendish masters.
But that's not this universe. This universe is about the dawning of the greatest age of exploration and adventure in history. A civilization of magic and a civilization of technology meet on their first tentative steps out beyond the confines of their own planets, and together they step boldly forth into the stars themselves. This is taking the traditional backdrop to Dungeons & Dragons and stepping
forward. This is a world of gunpowder and airships, sword and sorcery. It's the dawn of the Age of Exploration, where anyone with a little bit of luck and skill can join a guild or form a private company and go forth to explore the universe, with all of it's planets and magics and wonders. This is a universe were dragons fly through space on cosmic winds, and enchanted ships fly across the gulfs between worlds to find new planets to explore. The ruins of dozens of intergalactic civilizations of magic and high technology are scattered across untold worlds, their wealth and secrets free for the taking.
Perhaps you are a cartographer, charting the interstellar byways. Perhaps you are a warrior, lending your strength and skill to the cause. Maybe you are a cleric or paladin, protecting your friends and carrying the light of your faith into the far corners of the stars. But, at the end of the day, you are all
explorers. Freelancers or guildworkers, selfish or noble, for a higher cause, for your king or state, for the pursuit of knowledge, or even just for the enriching of your pocketbook, you are an
adventurer.
There are entire worlds out there that no one has ever seen before, that no man or elf or dwarf has ever set foot upon. Riches beyond the wildest imagining, and archeological finds that will revolutionize the way magic and technology are seen and worked. There are fortunes to be made, and glory to be had. The mysteries of the very underpinnings of the universe are out there to be had.
Are you and your comrades up to the task?
This is High Magic and Victorian Steampunk, Sword & Sorcerery & Gun. This is not Ravenloft or World of Darkness. This isn't about despair or destruction or fighting against impossible odds. It's about being the champions of the age of discovery, about going where no one has ever gone before, and finding things that had once been lost and forgotten.