That is the thing though, Personalities aren't really things to judge your characters morality and people that i've played in dungeon and dragons and games like it treat it as the be all end all and think that a static character must be created inorder to fufill the requirement of being in said alignment and doesn't allow for character development. You have to admit it at least is a gimmick and seems pretty cliche and very immature in terms of proper morality handling.
Well that's in my opinion a different problem and has less to do with the aligment system, and more with the DM and the narrative of the story.
For example a good story, leaves enough room for possible changes in aligment, and what happens if the 'player' chose to follow those. No one is saying that you should under no circumstances ever change your 'alignment', the game has rules for that, but it usually requires some heavy decisions. Of course people are not D&D blue prints. But People usually don't go from Gandhi to Hitler in just a couple of minutes, to use real life examples, if someone like Martin Luther King, who fought his whole life for equallity, suddenly endorsed the KKK, it would raise more then just one eyebrow. That's what role playing is in my opinion, you decide for a role and alignment, and try to stick to it. When you're playing Darth Vader and you face a certain decisions, then you have to think and decide like Darth Vader would, and it takes some very serious instances and internal struggles like his son geting tortured before his eyes, to change his 'aligment', so to speak. And that is what the system is there for, among other reasons.
I mean I have no clue what groups you played with. But If you're playing a Paladin, changing your alignment, means that you now become a fallen Paladin or a warrior, Clerics will loose certain magic abilities and so on. And it is also not true, that you can't change your aligment, a neutral thiev, can easily become neutral good or neutral evil, depending on the context. It really depends on the story though, what the narrative says and how well the DM created the game.
It simply doesn't make much sense to have some Baatezu suddenly become lawfull good for no reason, that's the whole point between the Blood War, where one side is chaotic evil and the other lawfull evil and they have this eternal struggle to decide who's the true nature of evil.
In my opinion you're simplyfing the system and it's use right now. I can understand and respect that YOU personaly, don't like the system, but as far as the D&D setting goes and what the aligment system is trying to achieve, it does a good job there.
I really have the feeling that you simply had always a shitty DM
.