I am sure there were greedy Dwarves - there always are. The only reason why the Elves would (almost) always side against Sauron is that the principal vice that they suffer from is their pride and their fanatacism, which means that an Elf become evil would still side against Sauron and with the other Elves, even so.
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The ideal Tolkien strategy game, IMO, would combine elements of Age of Wonders with something like TLA. In AoW, you can migrate cities from one race to another, and this takes some time, requires policing of the migrating city, and affects race relations (beneficial with the race coming in, detrimental to the one going out). What I think would be ideal is for a fantastical game centering around the great heroes and users of magical (or superhuman, if you will) powers, in which the fantastical aspect is reasonably common. However, instead of migrating races, you give some bonus to units, etc. of the invading race to displace the race in a conflict on a different map, and this would be much less fantastical and more 'purist', like TLA. Or, you could play as a race, and then you could revolt and oust the leader/wizard/priest/kings who would try to migrate you!














