In Tolkien's world there is little moral relativism, at least when it comes to the "evil" races. Orcs and goblins, and by extension Turbine-created monsters such as Merrevail, are corruptions of good beings such as elves. They are innately evil and irredeemable. Trying to paint a Israel-Palestine metaphor on the situation is pointless. And the author (probably unintentionally) seems to equate Palestinians, and by extension Muslims, with goblins and Merrevail.

Despite that, I do think that MMOs teach us some questionable lessons. Resources are infinite. There's no reason to conserve. Few actions have any lasting consequence. Those Merrevail you just uprooted from their home will be back in a few minutes. I don't think MMOs should be used to hammer social messages into players, but hopefully future MMOs will create truer living worlds where player behavior actually alters the game world, for good or bad.