It is balanced. Good and neutral gang up on evil (7v3), and goods defences complety block out psionic beams. And psionic missiles. Neutral, of course, is busy using it's extra upgrade tiles and trade slots to fund the destruction of evil.
But the point harper is making, is that evil random events give very good bonuses. If you wait a while for evil xeno ethics, you can get some nice bonuses out of the soldiering, starship, research events etc, where good need it quickly because almost all good decisions cost you production/economy/soldiering etc. I always leave xeno for a bit, till maybe +20% soldiering (and tir qaun training, and all the techs which noone else), so I have an advantage comparable to dread lords. Something like 90 v 2.
Evil does own