I really hate what I call "paper diplomacy". I'd rather have a friend than an ally any day. That's what I would consider FCC and VE to us. I could work out a nice business deal with someone, write it down on paper, and proceed to wipe my own ass with that very paper a week later. If I consider someone a friend and they consider me the same, I find that much more reliable than a business deal. After all, it's a diplomacy simulator on the internet. No organization exists to punish breach of contract, but reputation and word of mouth is pretty damn powerful.
Friends and allies can both do a disservice to the game. Friends, though, are what can
ruin the game for long periods of time. Look at the UIF - or rather, the lack of "UIF". It hasn't been one conglomerate of allied clans since the first strat it was called "UIF", but the constituent clans that comprised it are still friends and therefore will
never play the game at odds with each other; they'll say they're not allies but then work together and never be enemies. For a lot of people that worsened the state of the game; everyone who went against one clan in that group of friends met the wrath of the rest of them combined as well. The only way to solve that situation is to mass allies together, which in turn makes the game worse further after the friendship side has perished - because the allied side probably has recorded and notarized strat-legal documents proving their alliance, and so the course of an alliance might rigidly stay well past its due necessity.
An example slightly to the contrary, and pardon the use of past strats as examples, is the Chaos/Druzhina alliance in strat 2. It was an official and public alliance. We were friends, too, to an extent, but not to the point where we'd stay that way forever. We never talked much after the NA side got split from the EU side in later strats. Now here's where the example comes into play: Chaos members were also for a long time very close friends with the members of the FCC. It was personal. We had always wanted to work together with FCC on Strat, but circumstances kept us apart. The end of this scenario was when our
ally Druzhina was declaring war on our
friend FCC. Diplomatically, we were bound to Druzhina. We decided, in the spirit of the game, to go along with them and fight with our allies against our friends. I don't think some of them ever forgave us for it. I still feel as though there's a grudge harbored somewhere in there to this day... but would it have been better if we'd broken our alliance with Druzhina before it played out just because we didn't want to hurt the feelings of someone we liked?
So what does that get at? It's hard for everyone else if you have friends, and it's hard for you if you decide to play in the spirit of the game in spite of friends. Having friends is dangerous for you or ruinous to the game, having allies is constricting. Allies aren't much better because you put yourself into artificial positions where you'd do something you wouldn't normally do, which can be interesting, but usually winds up with the diplomacy of the map in a less fun state than if you had neither.
As to the current situation, certain clans put others in positions where they essentially have no choice. If you fight everyone you don't like, the people that don't like you (for doing it or for whatever) have no choice but to side with the ones you don't like. If clans that need help see an opportunity, they'll sell themselves out for you (or for the other side). When you fight so many factions on the map at once, and only ever certain factions, you cause the entire map to fracture into two sides, instead of what could be multiple smaller sides fighting on a more local scale. And when friendships between clans keep them from fighting, it essentially causes the factions to remain constantly as those two sides in a conflict. Friends
are allies, but because it's unofficial they'll never stop forming the same side in
any conflict that comes from one part of the side they've put themselves on.
"Helping the little guy" is not always admirable. If the little guy can't fight on his own, you step in, and no one will ever fight
him, they'll group up to fight
you. It keeps progress from happening and stagnates the game.
Maybe it all comes down to personal preference and who you dislike the most, but I'd like to think that situations can change and that wars and diplomatic alignments don't last forever - I certainly don't feel the same way diplomatically about Hospitaller this strat as I did last strat, but I don't imagine every faction is capable of that flexibility.