Great topic, Evisse!
I think that the problem with Gandalf as Ring-Lord is that the Ring, regardless of who wields it, is evil. It is only capable of creating evil. Sauron is evil too, so if he used the ring, he would use it out of evil intentions, in an effort to do evil things.
The problem with Gandalf is that he would be using the ring to do good things, but the ring (having a mind of its own) would still generate evil. As a result, good and evil would get all mixed up and muddled together - grey areas, like you said. In that case, there would be no pure good left in the world; all the good works Gandalf produced would be tainted by the evils of the ring. He would have tried to do what was best for everyone, but the ring would twist everything so that there was actually nothing really good at all going on. That's how I figure he "would have made good detestable and seem evil".
Sauron is a little bit better because at least his deeds are already evil, so they can't be tainted by the ring. He just does evil things and doesn't touch goodness. It's just much less confusing that way.
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Above all shadows rides the Sun and Stars forever dwell:
I will not say the Day is done, nor bid the Stars farewell.
-- Samwise Gamgee
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