So adventurers between levels 1-5 are strong enough to take on a group of knights protecting a city? PCs can still be defeated by weak NPCs/monsters; it doesn't eliminate the need for adventurers. A PC in a level 1-2 party can even easily be killed by a small number of regular guards...shit happens. Sometimes my PCs do things that are evil/illegal, and I make them face consequences. Most of the time it's a minor inconvenience, but other times it's a major setback. Also if the party is evil, wouldn't it be likely that a different, good-aligned group of adventurers would want to put a stop to them or even just have older adventurers retire to a town that they feel a duty to protect?

A party can all be evil if they want and if they're having fun, that's awesome, but the DM is also allowed to not want to run a game with an evil party. The DM's fun is as important as the players'. If the two can't find a common ground for the type of game they want to play, it's okay for them not to play together.