The problem here is simple: there is no legal definition of good and evil, which means that the final decision on whether or not you can use the software belongs to Douglas Crockford, the maintainer. If one person can arbitrarily decide whether or not you can use a piece of software, it's not Open Source.
I'm not sure that's how the license would be enforced, in practice. There's no automatic right for any party to dictate the meaning of undefined or unclear terms.
Yes, perhaps it's up to a judge to decide what "good"/"evil" means, however that still means there's 1 person who gets to decide whether or not you can use the software, ergo, not open source.
RedHat Legal was quoted; they mention that Good Guys won't use it for Evil, and Bad Guys will ignore the license; so it ends up perfectly unambiguous and enforceable. No issue.
