It is easy to pick out the good dwarves from the villains in Guild Wars: they have faces and quite often names. The Stone Summit dwarves are faceless and nameless and therefore it is okay to slaughter them in groups, while you are supposed to care about the Deldrimor dwarves with names and faces. Also, it is almost always okay to kill the red dots, while the green dots are your friends. Morality is baked into the UI.
See also the Cracked Star Wars explanation for why evil empires want closed-face helms but how that potentially hurts them when everyone turns out to be more empathic than previously suspected.
: Zubon
Of course, given that the Stone Summit are xenophobes who want to close off the Shiverpeaks to all non-Dwarfs (kinda conflicts with you needing to get a refugee caravan through there) and that Ascalon has treaties with the Deldrimor Dwarves and so you’re kinda obligated to be on their side in the civil war, it all makes sense, regardless of fashion choices.
Close-faced helms, by the way, despite Cracked.com’s comments, are more for the sake of terror than anything else. And in real life, well-trained soldiers (which lets out most of the USA’s ground pounders) tend to be reluctant to shoot at civillians – they’re not really trying. Note how good they are at taking out uniformed rebels, after all.