Yeah really, all that complaining about that Kaguya and you left out the part where she either helped murder the Lunar emissaries who came to forgive her and welcome her back home or, at the very least, stood by while Eirin did so in her name?
The PC-98 era definitely has less excuse in general. But in the Windows games, besides the Spell Card System being nonlethal, the whole cycle of incidents and extermination is basically for the sake of the youkai. At least, if Perfect Memento is to be believed, there are a couple places it mentions that when they tried just living in peace, youkai became weakened and unhappy. Thus the Spell Card System and the incidents, to give the illusion of constant bitter conflict without the harm of it.
(Since faith and belief are very important forces in Gensokyo, I get from this that youkai, on the whole, need to be seen as humanity's monsters like they originally were conceived to some degree, not just your neighbor with cat ears. We really tend to forget easily that they're, you know, not human.)
All that said, of course, just about all Touhous are big jerks. No question.