First, a defence of moral relativism:
1) Raynor, you don't explain your contradictions. However, I presume the first works as follows. The statements "no moral system is better than another" and "moral relativism is the only logical moral system" contradict one another.
In reponse to this, moral relativism is not a moral system, it is amoral. It does not say "this is good, this is bad, live your life by these rules." It says "good and bad do not exist, they are unnatural fabrications of the human mind enforced by society."
2)
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if there is no single standard to judge the value of a proposition, then even moral relativism has its limits and it naturally implies that other standards, contradicting moral relativism, are true as well.
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Again, moral relativism is not a morality system.
To relate this to Tolkien:
Viewed from a morally relative, or amoral, perspective, I see no objective evil in supporting evil characters. It's all in the minds of those who are offended.