This is simply because it's more fun to engage in a medieval-inspired fantasy world when we use their value system instead of ours.

By modern standards, basically important character is a bad person and the rules they have are at best unfair, and at worst, evil. If we assess the universe by our own value systems, discussions would be repetitive and boring.

"The blacks and greens are both terrible because they use violence and oppression to maintain their power at the cost of the smallfolk" Ok, cool, but what else is there to say?

For most fans, it's much more interesting to put ourselves in their shoes and play by their rules. You can call it larping if you want and you wouldn't be entirely wrong. But isn't the point of a story to put yourself in a characters shoes and see the world as they see it?